Westlake Chemical discloses proposal to acquire Georgia Gulf for US$30/share in cash; company, which owns 4.8% of Georgia Gulf's shares, expects US$1.1B deal to add to earnings in first fiscal year after closing
January 13, 2012
– $1.1 Billion Proposal Provides Immediate and Significant Premium to Georgia Gulf Shareholders
Westlake Chemical Corporation (NYSE: WLK - News) announced today that it has submitted a proposal to Georgia Gulf Corporation (NYSE: GGC - News) 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.
Albert Chao, Westlake’s President and Chief Executive Officer, said, “We believe that our proposal represents a unique opportunity to deliver significant and immediate value to Georgia Gulf stockholders. As such, we are surprised and disappointed that Georgia Gulf’s management has been unwilling to engage in substantive discussions with us.
“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. We urge the Georgia Gulf Board to act in the best interests of its shareholders by meeting with us to seriously discuss our compelling proposal,” Mr. Chao continued.
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.
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