The board of directors for US chemicals firm Georgia Gulf rejected Westlake Chemicals unsolicited proposal to acquire the company for a $30/share bid, valued by analysts at just over $1 billion.
The Georgia Gulf board and management team are committed to enhancing value for all stockholders and as such we have carefully reviewed Westlakes unsolicited proposal, said Paul Carrico, CEO.
After careful consideration, Georgia Gulfs board determined that Westlakes proposal is financially inadequate and not in the best interest of Georgia Gulf stockholders. We believe the Westlake proposal is an opportunistic attempt to acquire the companys uniquely positioned assets as we recover from an unprecedented downturn in the industries we serve and a volatile public equity market, and thereby deprive our stockholders of the companys inherent value.
Georgia Gulf communicated its response in a letter to Albert Chao, CEO of Westlake. The text of that letter can be read by clicking here.
Georgia Gulf also modified its shareholder rights plan in hopes of thwarting the bid. Details of those changes can be read here.
Westlake officials characterized the modifications as a poison pill.
Last nights response from Georgia Gulf demonstrates why Westlake had no choice other than to take our compelling proposal directly to Georgia Gulfs shareholders and we urge those shareholders to make it clear to Georgia Gulfs Board that they should immediately begin negotiations with us about getting a transaction done, the company said.
We have made a fair and compelling proposal that offers superior value to Georgia Gulf shareholders as compared to its existing strategy and standalone share price prospects, Westlake continued. We have also repeatedly said we would be willing to consider any opportunities that exist to justify increasing our offer.
Unfortunately Georgia Gulfs Board has refused to allow us to explore these opportunities and has instead insisted on a standstill arrangement that would unreasonably restrain their shareholders ability to timely consider our proposal.
Westlake made its first bid to acquire Georgia Gulf on September 20, 2011.