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
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
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
To read the full text of Westlake's letter, click here.