Westlake Chemical Corp. is making an unsolicited run at Georgia Gulf Corp., offering $30 per share in cash for all of Georgia Gulf's outstanding shares.
The offer represents a 51 percent premium to Georgia Gulf's 30-day average share price, which was just under $20. If accepted, the deal would add significantly to Westlake's assets in PVC resin and related downstream products, as well as in plastic feedstocks.
In a Jan. 13 news release, officials with Houston-based Westlake said that they had first contacted Georgia Gulf officials in September, but had received little reply, and as a result were taking their offer public.
“We believe that our proposal represents a unique opportunity to deliver significant and immediate value to Georgia Gulf stockholders,” Westlake president and CEO Albert Chao said in the release. “As such, we are surprised and disappointed that Georgia Gulf's management has been unwilling to engage in substantive discussions with us.”
Officials with Atlanta-based Georgia Gulf could not be reached for comment. The firm has struggled since 2006 to digest its $1.6 billion acquisition of building products maker Royal Group Inc. In the first nine months of 2011, Georgia Gulf's sales grew 20 percent to more than $2.5 billion, and its profit more than doubled to $61 million. But in 2010, the firm's profit had fallen almost 70 percent, even as sales grew more than 40 percent to $2.8 billion.