US Westlake may withdraw offer to Georgia Gulf - execs

21 February 2012 23:02  [Source: ICIS news]

Westlake headquartersHOUSTON (ICIS)--US chemical producer Westlake said on Tuesday it might withdraw its tender offer of $35/share to acquire Georgia Gulf if it does not receive more positive interaction from the company's board and investors.

“In our view a combination of Georgia Gulf with Westlake on the terms we have proposed would provide significant benefit to both companies’ shareholders,” chief executive and president Albert Chao said during a conference call.

“Georgia Gulf shareholders would receive an immediate and substantial premium. The combined company would have additional scale and improved cost structure and additional growth opportunities. Together, I believe we’ll be well positioned to meet the industry and economic challenges that will face us in coming years,” he said.

Chao and Steve Bender, Westlake's CFO, spoke to investors and analysts during a conference call after the company released its fourth-quarter 2011 earnings results.

So far, Georgia Gulf’s management has rebuffed Westlake’s offer, saying in public statements that it did not feel the company’s valuation of Georgia Gulf was adequate. During its own fourth-quarter earnings conference call last week, Georgia Gulf executives declined to discuss the Westlake offer.

Chao said Westlake continues to want to negotiate with the Georgia Gulf's board and management.

“And we are willing to explore where opportunities exist that would justify increasing our proposed price,” Chao said. But, he added, Westlake believes its valuation of Georgia Gulf is fair.

“We have not withdrawn a proposal so far. However, at some point if we do not see a real change in approach from Georgia Gulf’s board and management, we will,” he said.

Chao declined to comment further on the situation.

Westlake's current bid of $35/share is up from an original bid of $30/share made in January. The initial bid valued Georgia Gulf at $1bn.

($1 = €0.76)

By: Ken Fountain

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