Westlake Chemical Corp. took another step forward in its takeover bid for Axiall Corp. on Feb. 15 by announcing a slate of 10 individuals — including former plastics industry leaders Charles Crew and Randy Woelfel — that it plans to nominate to the Axiall board of directors.
Westlake officials say Crew, the former president and CEO of Sabic Innovative Plastics, Woelfel, the former CEO of Nova Chemicals Inc., and the others on its slate are independent, highly qualified nominees. Axiall's current board has 10 members.
Crew left Sabic in 2012 and currently isan independent director of DuBois Chemicals. In addition to his time at Nova, Woelfel is a former president of Basell North America and currently an director of Black & Veatch and advisor to several petrochemicals and plastics companies.
Based in Houston, Westlake manufactures petrochemicals, polymers and PVC building products. The company is trying to acquire Axiall, which produces PVC resins, compounds and building products, for $20 per share. The amount is based on $11 in cash and almost 0.2 of a Westlake share, which represented a value of $9 based on Westlake's closing price of Jan. 22. That was the last trading day before the acquisition proposal.
Westlake publicly announced its $2.9 billion takeover bid of Axiall on Jan. 29. Atlanta-based, Axiall fired back on Feb. 11 with a 26-page presentation for the Securities and Exchange Commission that says Westlake has not only undervalued Axiall but shareholders question the corporate governance , noting that one family owns 70 percent of Westlake common stock, and commitment considering Westlake's 2011 bid to acquire Georgia Gulf Corp. was dropped seven months later.
However, Albert Chao, Westlake's president and CEO, said in a Feb. 16 news release that it has heard from Axiall shareholders who want to discuss the proposal.
“Given the clear shareholder support and the compelling nature of our proposal, we are disappointed that Axiall has been unwilling to engage with us,” Chao said. “Our proposal, which represented a 108 percent premium to Axiall's closing price on the day before we submitted it, provides both certainty and upside potential through the combination of cash and an ownership interest in the combined company.”
Axiall shareholders would be better served by the slate of board nominees, Chao added.
“Our nominees have the necessary track record, strategic vision and experience to maximize shareholder value,” he said. “We believe they will consider our proposal in an independent manner and in accordance with their fiduciary duties. The nominations give Axiall shareholders an opportunity to voice their disappointment with Axiall's refusal to engage in discussions with us regarding our proposal.”
Axiall's annual meeting for 2016 hasn't been scheduled yet. Last year it was in May.
In addition to Crew and Woelfel, other nominees on the Westlake slate are:
• Steven Blank, the former executive vice president, chief financial officer and treasurer of NuStar GP LLC, and NuStar GP Holdings LLC. He is currently an independent director of TransMontaigne LP and Dakota Plains Holdings Inc.
• Michael Campbell, the former chairman, president and CEO of Arch Chemicals, Inc., and executive vice president of Olin Corp.. He is currently an independent director of WestRock Co. He also is a former director of Milliken & Company and former chairman of the American Chemistry Council.
• Ruth Dreessen, the managing director of Lion Chemical Capital LLC. She is a former executive vice president and CFO of TPC Group Inc. and senior vice president and CFO of Westlake from 2003-2005. She is also currently chairwoman of Gevo and a director of Targa Resources Partners LP. In addition, she is a former director of Georgia Gulf Corp. (a predecessor to Axiall) from 2001-2003, and Versar Inc.
• Angela Minas, an independent director and chair of the audit committee of CONE Midstream Partners LP and an independent director of Ciner Resources LP (formerly OCI Resources LP). She also is a former vice president and CFO of DCP Midstream Partners.
• David Reeves, the former president of strategy, planning and technology, and a long-time executive of Chevron Corp. He is a former director of ChevronPhillips Chemical Co.
• Ron Steger, a senior advisor to the Effectus Group and director of Overseas Shipholding Group, Inc. He also is a former audit partner and long-time partner of KPMG LLP.
• James Swent III, the former executive vice president and CFO of Ensco plc., co-founder and managing director of Amrita Holdings LLC, CFO and CEO of Cyrix Corp., and CFO and CEO of American Pad and Paper Co.
• Gary Whitlock, a former executive vice president and CFO of CenterPoint Energy Inc., vice president of finance and CFO of Dow AgroSciences, a subsidiary of Dow Chemical Co., and a former director of various Dow entities, Texas Genco Holdings Inc., KiOR Inc. and Enable Midstream Partners LLC.
