17 January 2012 13:13 [Source: ICIS news]
(recast to include Westlake response)
(adds background information and additional factors on why takeover bid was rejected)
On 13 January, Westlake made a $30/share (€23/share) bid valued at more than $1bn (€780m) to acquire all outstanding shares of
“After careful consideration,
Carrico described the bid as “an opportunistic attempt to acquire the company’s uniquely positioned assets as we recover from an unprecedented downturn”, adding that the proposal deprived
The company said it had sent a letter to
Georgia Gulf said at the time of Westlake’s initial approach in September, the public market valuation of the company was an “aberration driven by the global economic uncertainty taking place during the third and fourth quarters of 2011”, with its share price having contracted 54% compared with its 52-week high of $40.59 per share just a few months earlier.
It added that market valuations in company’s industry have begun to recover, “with Georgia Gulf’s share price appreciating over 30% since you made your initial proposal,”.
“We believe the
Georgia Gulf’s board added Westlake’s proposal “is not compelling by any metric,” and that the proposal only reflects only a 23% premium to Georgia Gulf’s trading price of $24.48 per share on the last trading day prior to Westlake’s public proposal and represents a discount of 26% to the group’s 52-week high.
In addition, the company said the statements in Westlake’s letter on 13 January that Georgia Gulf was unwilling to provide information or enter into substantive discussions were untrue, adding that it had been willing to engage in discussions, provided Westlake signed a customary confidentiality agreement.
“Simply put, it was
Saying it made a “fair and compelling proposal”, Westlake on Tuesday urged Georgia Gulf shareholders to “make it clear to Georgia Gulf’s board that they should immediately begin negotiations with us about getting a transaction done”.
Additional reporting by Graeme Paterson
($1 = €0.79)
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