US-based petrochemical firm Westlake Chemical Corporation has announced a new unsolicited bid to buy all outstanding shares in competitor Georgia Gulf Corp. following a halt to negotiations between the two companies on a tieup that started on September 30.
In a statement issued Friday, Westlake made public its offer of $30/share in cash for Georgia, which represents a 51% premium to the latter's 30-day volume-weighted average share price of $19.82.
Georgia Gulf wasn't immediately available for comment.
A source familiar with company operation said that "so far is only a proposal and not yet a done deal."
Along with the public disclosure, Westlake sent a letter to Georgia Gulf's board of directors informing them of its intention to go ahead with the acquisition plans, despite attempt by Georgia Gulf's management to "unreasonably restrain [its] stockholders' ability to timely consider [Westlake's] proposal."
The parties last met on December 22.
"Since the initial delivery of our proposal on September 20, 2011, we have made numerous attempts to engage in meaningful dialogue with Georgia Gulf and have expressed our willingness to explore, pursuant to a customary confidentiality agreement, whether opportunities exist that would justify increasing our proposal price. However, Georgia Gulf has been unwilling to provide us with information that would allow us to explore these opportunities or to enter into substantive discussions," said Westlake President and CEO Albert Chao.
Westlake currently owns approximately 4.8% of the outstanding common shares of Georgia Gulf.
The merger of the companies would see the creation of a major North American olefins, vinyls and building products producers, with increased scale in the growing global vinyls market and with additional growth opportunities. The acquisition would enable Westlake to reinforce its position as a polyvinyl chloride resins producer and vinyl-based building products supplier, while also expanding its global product offerings.
