01 February 2012 14:14 [Source: ICIS news]
HOUSTON (ICIS)--US-based Westlake Chemical has boosted its bid for Georgia Gulf to $35/share (€26.6/share), but the latter rejected the increased bid, Westlake reported on Wednesday.
Petrochemical and polymers producer Westlake’s initial all-cash bid, first disclosed on 13 January, was for $30/share, valuing US-based chloralkali and polyvinyl chloride (PVC) company Georgia Gulf at around $1bn.
The increased proposal also offers to include a stock component, with Westlake paying part of the purchase price in Westlake common stock, it said.
Westlake CEO Albert Chao said: “Based on our discussions with a number of Georgia Gulf’s shareholders, we now know that they are very interested in seeing this transaction completed.
“Our increased proposal also offers to include a stock component that allows Georgia Gulf’s shareholders to participate in the upside of the potential combination if they desire to do so.”
Given marketplace uncertainties and the nature of the industry, Westlake believed that Georgia Gulf’s prospects as a standalone, non-integrated PVC producer “carry significantly greater risks than the certainty we are offering”.
“We believe a combined company with captive ethylene capacity, increased scale, better costs and a robust balance sheet would be better able to overcome these challenges,” Chao added.
Westlake also said it would not nominate director candidates for Georgia Gulf’s 2012 annual meeting of stockholders, as it desired to “to engage in friendly negotiations with Georgia Gulf to achieve a mutually beneficial transaction”.
Georgia Gulf was not immediately available for comment.
($1 = €0.76)
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