UpdateGeorgia Gulf says new Westlake Chemical bid not sweet enough

01 February 2012 17:33  [Source: ICIS news]

(updates with response from Georgia Gulf and analyst's comment)

HOUSTON (ICIS)--Georgia Gulf wants Westlake chemical to raise its takeover bid price to a level that reflects “the company's true intrinsic value,” the US-based chemical producer said on Wednesday as it responded to Westlake's increased bid.

In a filing with US securities regulators, Georgia Gulf acknowledged Westlake’s increased $35/share bid but said this still did not reflect Georgia Gulf's underlying intrinsic value “which we view as well above prevailing stock market prices”.

Georgia Gulf’s share price was down 1.4% to $34.56/share at 11:38 hours in New York (16:38 hours GMT).

Georgia Gulf issued the filing as Westlake said it had increased its bid from previously $30/share. The previous bid, as disclosed last month, valued Georgia Gulf at around $1bn (€760m).

Georgia Gulf CEO Paul Carrico also said that his firm is “ready and willing to enter into substantive good faith discussions” with Westlake.

However, Carrico insisted that Westlake must first enter into “standard confidentiality agreement” with Georgia Gulf. He rejected suggestions that Georgia Gulf was refusing to negotiate in good faith.

Meanwhile, a chemical industry analyst said that Westlake’s increased bid for Georgia Gulf seems “reasonably priced and strategically sound”.

Hassan Ahmed, head of research at New York-based equity research firm Alembic Global Advisors, also said that Westlake remained the most obvious suitor for Georgia Gulf.

However, Ahmed would not completely rule out a rival bid by producers such as Braskem, Formosa Plastics or Shintech.

($1 = €0.76)

By: Stefan Baumgarten
+1 713 525 2653

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