MOSCOW (
MRC) -- After local company Axiall Corp. rejected their unsolicited USD1.4 bln merger offer in late January, Westlake Chemical Corp., located in Sulphur, made overtures directly to Axiall’s shareholders, thus launching an attempt at a USD2.9 bln hostile takeover, reported
Plastemart.
On Tuesday, February 16, Albert Chao, Westlake’s president and CEO, released a statement offering to Axiall shareholders a slate of "independent and highly qualified nominees, committed to acting in the best interests of all Axiall shareholders," to replace Axiall’s current board of directors. "We have heard from many Axiall shareholders who have expressed their desire for Axiall to engage in discussions with us regarding our proposal," he said.
In a return statement issued Wednesday, February 17, Axiall stated they viewed the board nominations to be an "attempt to force a sale of Axiall to Westlake at a price that significantly undervalues Axiall’s assets and its long-term prospects." The statement further questioned the proposed members’ "independence" and charged that, "if elected to the Axiall board, Westlake’s nominees would have inherent conflicts given Westlake’s focus on acquiring Axiall."
The initial offer from Westlake Chemical Corporation, made public January 29 and delivered to Axiall January 25, was for the acquisition of all of the outstanding common shares of Axiall at USD20 per share in the form of USD11 in cash and 0.1967 shares of Westlake stock.
After a review by Axiall’s board and financial and legal advisors, Timothy Mann, Axiall president and chief executive officer, issued the following statement: "We believe that Westlake’s proposal is an opportunistic attempt to take advantage of challenging public equity market conditions and significantly undervalues Axiall’s assets and its long-term prospects. The price of Axiall stock was at USD20.18 as recently as Dec. 1, 2015. We remain committed to achieving our USD100 million run rate cost reduction and productivity target by the end of 2016."
In October of 2014, Axiall Corporation
announced plans for a USD3 billion ethylene production facility and adjacent mono-ethylene glycol (MEG) plant near the Maplewood area of Sulphur. Mann addressed that also. He said Axiall is also committed to "our investment in the LACC ethane cracker project with our joint venture partner Lotte Chemical." The project is on track for breaking ground in 2019.
Axiall is a chemical company formed in 2012 from the chemical assets of PPG and Georgia Gulf. The PPG products are primarily chlor-alkali. The combined companies will be the third largest producer of chlor-alkali in the US after Dow Chemical and Occidental. PPG will own 50.5% of the combined companies. The company is headquartered in Atlanta, GA.
Westlake Chemical Corporation is a U.S. manufacturer and supplier of petrochemicals and polymers, headquartered in Houston, Texas. The range of company's products includes ethylene, polyethylene, styrene, propylene, caustics, polyvinyl chloride and plastic products. Westlake is one of the major ethylene producers in the US and its Calvert City operation is a large integrated PVC site.
MRC