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Westlake increases offer for Georgia Gulf
06 Feb '12
3 min read
Westlake Chemical Corporation announced that it has submitted a revised proposal to the board of Georgia Gulf Corporation to acquire all the outstanding shares of Georgia Gulf for $35.00 per share in cash. The Company also announced that Georgia Gulf has rejected this increased offer. The revised proposal represents a 17% increase to Westlake's previous offer of $30.00 per share, a 77% premium to Georgia Gulf's unaffected 30-day volume weighted average share price of $19.82 prior to our original public offer and a substantial premium over the volume weighted average share price since the initial offer.
In response to direct feedback from Georgia Gulf's shareholders, Westlake also stated in a letter to Georgia Gulf (see below) that it is willing to pay a portion of the merger consideration in Westlake common stock to allow Georgia Gulf's shareholders to share in the value creation and synergies of the proposed combination and participate in Westlake's advantaged ethylene position.
In addition, Westlake said in the letter that in furtherance of its desire to engage in friendly negotiations with Georgia Gulf to achieve a mutually beneficial transaction, Westlake has decided that it will not nominate director candidates for Georgia Gulf's 2012 annual meeting of stockholders.
Albert Chao, Westlake's President and Chief Executive Officer, 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.
"Westlake is a disciplined buyer with extensive industry knowledge and we know what Georgia Gulf is worth. Westlake's increased proposal delivers an immediate and significant premium, and represents superior value compared to what Georgia Gulf's market value would be absent a transaction and on a standalone basis.
"Given marketplace uncertainties and the nature of the industry, we believe Georgia Gulf's standalone prospects, as an unintegrated 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."
Mr. Chao concluded, "We would again ask the Georgia Gulf Board to move forward to achieve a transaction that will benefit its shareholders. If the current Georgia Gulf Board is unwilling to proceed based on our premium $35 proposal, we would be prepared to negotiate with a Board that more closely reflects the views of Georgia Gulf's shareholders - many of whom favor moving forward promptly with a combination of Georgia Gulf and Westlake."
In response to direct feedback from Georgia Gulf's shareholders, Westlake also stated in a letter to Georgia Gulf (see below) that it is willing to pay a portion of the merger consideration in Westlake common stock to allow Georgia Gulf's shareholders to share in the value creation and synergies of the proposed combination and participate in Westlake's advantaged ethylene position.
In addition, Westlake said in the letter that in furtherance of its desire to engage in friendly negotiations with Georgia Gulf to achieve a mutually beneficial transaction, Westlake has decided that it will not nominate director candidates for Georgia Gulf's 2012 annual meeting of stockholders.
Albert Chao, Westlake's President and Chief Executive Officer, 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.
"Westlake is a disciplined buyer with extensive industry knowledge and we know what Georgia Gulf is worth. Westlake's increased proposal delivers an immediate and significant premium, and represents superior value compared to what Georgia Gulf's market value would be absent a transaction and on a standalone basis.
"Given marketplace uncertainties and the nature of the industry, we believe Georgia Gulf's standalone prospects, as an unintegrated 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."
Mr. Chao concluded, "We would again ask the Georgia Gulf Board to move forward to achieve a transaction that will benefit its shareholders. If the current Georgia Gulf Board is unwilling to proceed based on our premium $35 proposal, we would be prepared to negotiate with a Board that more closely reflects the views of Georgia Gulf's shareholders - many of whom favor moving forward promptly with a combination of Georgia Gulf and Westlake."
Westlake Chemical Corporation
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