Westlake Chemical Corp. and Axiall Corp. might be looking to avoid a proxy battle.
Both firms have nominated slates of directors to be voted on at Axiall's annual meeting on June 17. But on May 23, officials with Houston-based Westlake said in a news release that Axiall had asked its firm to submit a revised proposal to acquire Atlanta-based Axiall.
Axiall officials have asked Westlake to submit a revised proposal or to reaffirm its current proposal by June 3. Westlake officials said in the release they would do so.
Axiall officials responded by saying in an email that Westlake "has now chosen to participate in Axiall's strategic alternatives review process.
"As previously disclosed," they added, "Axiall is engaged in ongoing discussions regarding strategic alternatives, including the possible sale of the company, with other third parties and has provided extensive non-public information, a detailed management presentation, expert sessions, site visits and synergy discussions."
Officials noted in the email that "there can be no assurance that any transaction will result from any of these discussions or as to the timing of any transaction should one result."
The two firms have been negotiating — and not always peacefully — since January, when Westlake made an offer to acquire Axiall for $2.9 billion. Westlake later increased the value of its offer to $3.1 billion. Both offers were rejected by Axiall management for undervaluing the company.
Both Westlake and Axiall are major PVC makers in North America. Westlake also is a large supplier of polyethylene and ethylene, and both companies are major producers of construction-related PVC products.
In 2015, Axiall posted sales of $3.36 billion — down 12 percent vs. 2014 — and a loss of $816.4 million. Most of the loss can be attributed to a non-cash charge of almost $850 million for goodwill impairment that Axiall took in the third quarter, as the firm wrote down the value of some of its holdings.
Westlake's 2015 financial results showed sales of $4.46 billion and profit of $646 million. The sales total was up 1 percent vs. 2014, while the profit level was down almost 5 percent. Lower selling prices — particularly for polyethylene and ethylene feedstock — impacted Westlake in 2015.
On Wall Street, Axiall's per-share stock price began the year near $15.50 but was near $23 in late trading May 23. Westlake's per-share price started at $54.30 but was at $43.20 in the same comparison.