Westlake Chemical Corporation (WLK) Offers $30/Share Bid on Georgia Gulf Corporation (GGC)
Tweet
Share
E-mailGet Alerts WLK Hot Sheet
Join SI Premium – FREE
Westlake Chemical Corporation (NYSE: WLK) announced today that it has submitted a proposal to Georgia Gulf Corporation (NYSE: GGC) to acquire all of the outstanding shares of Georgia Gulf for $30.00 per share in cash. The proposal represents a 51% premium to Georgia Gulf’s 30-day volume-weighted average share price of $19.82. Westlake’s proposal is not subject to a financing condition. Westlake expects the transaction would be accretive to earnings in the first fiscal year after the close of the transaction. Westlake also noted that it has acquired shares representing approximately 4.8% of the outstanding common shares of Georgia Gulf.
The combination of Westlake and Georgia Gulf would create one of the leading North American olefins, vinyls, and building products producers, with increased scale in the growing global vinyls market and with additional growth opportunities. Acquiring Georgia Gulf would enable Westlake to become a leading PVC resins producer and vinyl-based building products supplier, and would provide Westlake with opportunities to expand its global product offerings.
In a letter sent to Georgia Gulf today, Westlake stressed that it would prefer a negotiated transaction with Georgia Gulf, but stated that it has determined that this step was now necessary. Westlake has retained Deutsche Bank Securities Inc. and Morgan Stanley & Co. LLC as its financial advisors, Vinson & Elkins LLP and Morris, Nichols, Arsht & Tunnell LLP as its legal advisors, MacKenzie Partners, Inc., and other advisors. For additional information about Westlake’s proposal, please visit www.WestlakeGGC.AcquisitionProposal.com.
Below is the full text of the most recent letter sent from Westlake to Georgia Gulf:
January 13, 2012
Board of Directors
Georgia Gulf Corporation
115 Perimeter Center Place
Suite 460
Atlanta, GA 30346
Attention: Mr. Mark Noetzel, Chairman of the Board
Dear Members of the Board:
We are disappointed by your continued rejection of our proposal to acquire all of the outstanding shares of Georgia Gulf Corporation (“Georgia Gulf”) for $30.00 per share in cash, which we first offered on September 20, 2011. The $30.00 per share offer price represents a significant 66% premium to Georgia Gulf’s volume-weighted average closing share price of $18.02 since our initial offer. Notwithstanding our compelling proposal and our repeated attempts at engagement, you have been unwilling to discuss value or to commence negotiations with us despite the opportunity to provide your stockholders with immediate liquidity at a sizeable premium in an uncertain economic environment. Since we first made our proposal, your stock has traded as low as $12.84 per share, yet we have confirmed our $30 per share offer without a financing condition and you have not engaged.
We held out some hope that our meeting with Georgia Gulf management on December 22, 2011, would finally allow the parties to have a serious dialogue about our proposal. After all, we have for months expressed our willingness to explore with you, pursuant to a customary confidentiality agreement, whether opportunities exist that would justify increasing our offer to make it even more attractive to the Georgia Gulf stockholders. Unfortunately, rather than taking the opportunity to demonstrate additional value or enter into substantive discussions, you continued to insist on a standstill arrangement that would unreasonably restrain your stockholders’ ability to timely consider our proposal. Moreover, you have insisted on this restrictive standstill arrangement without any commitment on your part to respond to requests for information or to negotiate with us in good faith. Asking for such a constraint without providing us any reason to believe you would support a transaction at any price is untenable from our perspective, and we suspect your stockholders would share this perspective too.
Consequently, we have decided to make the terms of our all-cash proposal public. Given the significant premium and near term liquidity, we are confident that Georgia Gulf’s stockholders will enthusiastically embrace it.
We have put considerable time and resources into evaluating this transaction and developing our proposal. Our board of directors supports it and we have sufficient cash and borrowing capacity to fully fund this cash transaction. We are committed to completing a transaction with Georgia Gulf and we stand ready to meet and discuss next steps towards a mutually beneficial negotiated transaction with you and your financial and legal advisors at any time and in any location. As we have stressed since our initial correspondence in September, we very much prefer to negotiate a transaction with Georgia Gulf, but we have determined that making your stockholders aware of our proposal is necessary. We already have acquired shares representing approximately 4.8% of the outstanding common shares of Georgia Gulf. We also have engaged Deutsche Bank Securities Inc. and Morgan Stanley & Co. LLC as our financial advisors, Vinson & Elkins LLP and Morris, Nichols, Arsht & Tunnell LLP as our legal advisors, MacKenzie Partners, Inc., and other advisors in relation to this transaction.
We look forward to speaking to you and your stockholders about our attractive proposal to combine Westlake and Georgia Gulf.
Sincerely yours,
Albert Chao
President and Chief Executive Officer
About Westlake Chemical Corporation
The combination of Westlake and Georgia Gulf would create one of the leading North American olefins, vinyls, and building products producers, with increased scale in the growing global vinyls market and with additional growth opportunities. Acquiring Georgia Gulf would enable Westlake to become a leading PVC resins producer and vinyl-based building products supplier, and would provide Westlake with opportunities to expand its global product offerings.
In a letter sent to Georgia Gulf today, Westlake stressed that it would prefer a negotiated transaction with Georgia Gulf, but stated that it has determined that this step was now necessary. Westlake has retained Deutsche Bank Securities Inc. and Morgan Stanley & Co. LLC as its financial advisors, Vinson & Elkins LLP and Morris, Nichols, Arsht & Tunnell LLP as its legal advisors, MacKenzie Partners, Inc., and other advisors. For additional information about Westlake’s proposal, please visit www.WestlakeGGC.AcquisitionProposal.com.
Below is the full text of the most recent letter sent from Westlake to Georgia Gulf:
January 13, 2012
Board of Directors
Georgia Gulf Corporation
115 Perimeter Center Place
Suite 460
Atlanta, GA 30346
Attention: Mr. Mark Noetzel, Chairman of the Board
Dear Members of the Board:
We are disappointed by your continued rejection of our proposal to acquire all of the outstanding shares of Georgia Gulf Corporation (“Georgia Gulf”) for $30.00 per share in cash, which we first offered on September 20, 2011. The $30.00 per share offer price represents a significant 66% premium to Georgia Gulf’s volume-weighted average closing share price of $18.02 since our initial offer. Notwithstanding our compelling proposal and our repeated attempts at engagement, you have been unwilling to discuss value or to commence negotiations with us despite the opportunity to provide your stockholders with immediate liquidity at a sizeable premium in an uncertain economic environment. Since we first made our proposal, your stock has traded as low as $12.84 per share, yet we have confirmed our $30 per share offer without a financing condition and you have not engaged.
We held out some hope that our meeting with Georgia Gulf management on December 22, 2011, would finally allow the parties to have a serious dialogue about our proposal. After all, we have for months expressed our willingness to explore with you, pursuant to a customary confidentiality agreement, whether opportunities exist that would justify increasing our offer to make it even more attractive to the Georgia Gulf stockholders. Unfortunately, rather than taking the opportunity to demonstrate additional value or enter into substantive discussions, you continued to insist on a standstill arrangement that would unreasonably restrain your stockholders’ ability to timely consider our proposal. Moreover, you have insisted on this restrictive standstill arrangement without any commitment on your part to respond to requests for information or to negotiate with us in good faith. Asking for such a constraint without providing us any reason to believe you would support a transaction at any price is untenable from our perspective, and we suspect your stockholders would share this perspective too.
Consequently, we have decided to make the terms of our all-cash proposal public. Given the significant premium and near term liquidity, we are confident that Georgia Gulf’s stockholders will enthusiastically embrace it.
We have put considerable time and resources into evaluating this transaction and developing our proposal. Our board of directors supports it and we have sufficient cash and borrowing capacity to fully fund this cash transaction. We are committed to completing a transaction with Georgia Gulf and we stand ready to meet and discuss next steps towards a mutually beneficial negotiated transaction with you and your financial and legal advisors at any time and in any location. As we have stressed since our initial correspondence in September, we very much prefer to negotiate a transaction with Georgia Gulf, but we have determined that making your stockholders aware of our proposal is necessary. We already have acquired shares representing approximately 4.8% of the outstanding common shares of Georgia Gulf. We also have engaged Deutsche Bank Securities Inc. and Morgan Stanley & Co. LLC as our financial advisors, Vinson & Elkins LLP and Morris, Nichols, Arsht & Tunnell LLP as our legal advisors, MacKenzie Partners, Inc., and other advisors in relation to this transaction.
We look forward to speaking to you and your stockholders about our attractive proposal to combine Westlake and Georgia Gulf.
Sincerely yours,
Albert Chao
President and Chief Executive Officer
About Westlake Chemical Corporation
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Tesla plans 'flying' Roadster stunt at SpaceX Texas site as early as August
- Hydrofarm Holdings Group, Inc. (HYFM) Misses Q2 EPS by 134c
- Newton Golf Company (NWTG) Reports Q2 Loss of $0.49
Create E-mail Alert Related Categories
Mergers and AcquisitionsRelated Entities
Deutsche Bank, Morgan Stanley, EarningsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
