Westlake Chemical has submitted a revised proposal to the board of Georgia Gulf to acquire all the outstanding shares of the company for $35.00/share in cash.
That follows Georgia Gulfs rejection of Westlakes previous offer.
The revised proposal represents a 17% increase to Westlakes previous bid, the company said, a 77% premium to Georgia Gulfs unaffected 30-day volume weighted average share price of $19.82 prior to the original offer and a premium over the volume weighted average share price since the offer.
In response to direct feedback from Georgia Gulfs shareholders, Westlake said it stated in a letter to Georgia Gulf that it is willing to pay a portion of the merger consideration in Westlake common stock.
In turn, that would allow Georgia Gulfs 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, it will not nominate director candidates for Georgia Gulfs 2012 annual meeting of stockholders.
Albert Chao, Westlakes CEO, said: Based on our discussions with a number of Georgia Gulfs 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 Gulfs 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, he continued.
Westlakes increased proposal delivers an immediate and significant premium, and represents superior value compared to what Georgia Gulfs 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.
To read the full text of Westlake's letter, click here.