Georgia Gulf Rejects Increased Offer Despite Challenging Market
Dynamics and Risk to Company's Standalone Prospects
Westlake Expresses Willingness To Offer Stock Component If
Shareholders Want To Participate in Upside of Combined Company
HOUSTON--(BUSINESS WIRE)--Feb. 1, 2012--
Westlake Chemical Corporation (NYSE: WLK) announced today that it has
submitted a revised proposal to the board of Georgia Gulf Corporation
(NYSE: GGC) to acquire all the outstanding shares of Georgia Gulf for
$35.00 per share in cash. The Company also announced that Georgia Gulf
has rejected this increased offer. The revised proposal represents a 17%
increase to Westlake's previous offer of $30.00 per share, a 77% premium
to Georgia Gulf's unaffected 30-day volume weighted average share price
of $19.82 prior to our original public offer and a substantial premium
over the volume weighted average share price since the initial offer.
In response to direct feedback from Georgia Gulf's shareholders,
Westlake also stated in a letter to Georgia Gulf (see below) that it is
willing to pay a portion of the merger consideration in Westlake common
stock to allow Georgia Gulf's shareholders to share in the value
creation and synergies of the proposed combination and participate in
Westlake's advantaged ethylene position.
In addition, Westlake said in the letter that in furtherance of its
desire to engage in friendly negotiations with Georgia Gulf to achieve a
mutually beneficial transaction, Westlake has decided that it will not
nominate director candidates for Georgia Gulf's 2012 annual meeting of
Albert Chao, Westlake's President and Chief Executive Officer, said,
"Based on our discussions with a number of Georgia Gulf's shareholders,
we now know that they are very interested in seeing this transaction
completed. Our increased proposal also offers to include a stock
component that allows Georgia Gulf's shareholders to participate in the
upside of the potential combination if they desire to do so.
"Westlake is a disciplined buyer with extensive industry knowledge and
we know what Georgia Gulf is worth. Westlake's increased proposal
delivers an immediate and significant premium, and represents superior
value compared to what Georgia Gulf's market value would be absent a
transaction and on a standalone basis.
"Given marketplace uncertainties and the nature of the industry, we
believe Georgia Gulf's standalone prospects, as an unintegrated PVC
producer, carry significantly greater risks than the certainty we are
offering. We believe a combined company - with captive ethylene
capacity, increased scale, better costs and a robust balance sheet -
would be better able to overcome these challenges."
Mr. Chao concluded, "We would again ask the Georgia Gulf Board to move
forward to achieve a transaction that will benefit its shareholders. If
the current Georgia Gulf Board is unwilling to proceed based on our
premium $35 proposal, we would be prepared to negotiate with a Board
that more closely reflects the views of Georgia Gulf's shareholders -
many of whom favor moving forward promptly with a combination of Georgia
Gulf and Westlake."
Below is the full text of the most recent letter sent from Westlake to
February 1, 2012
Georgia Gulf Corporation
115 Perimeter Center Place, Suite 460
Attention: Board of Directors
I am writing to confirm that we have increased our proposed purchase
price to $35 per share in cash for all the outstanding common shares of
Georgia Gulf as conveyed to your CEO, Paul Carrico, last Friday,
conditioned on Georgia Gulf commencing good faith negotiations with us.
Our revised proposal represents a 17% increase to our previous offer and
a 77% premium to Georgia Gulf's unaffected 30-day volume weighted
average share price of $19.82 prior to our original public proposal.
We are disappointed that, despite presenting you with a significant
increase to our price that would provide immediate value, you have
rejected our increased $35 per share proposal and continue to
effectively refuse to engage in negotiations which are clearly in the
best interests of your shareholders. We intend to make our revised
proposal public and urge you to reconsider your position and allow your
shareholders to realize the benefits of the offer.
After additional consideration and careful analysis of Georgia Gulf and
the market's reaction to our prior proposal, we believe that our revised
proposal represents full value for Georgia Gulf. Based on our
discussions with Georgia Gulf's shareholders we now know that they are
very interested in seeing this transaction completed. As we told Paul on
Friday, in response to direct feedback from your shareholders, we are
also willing to pay a portion of the $35 per share merger consideration
in Westlake common stock, allowing your shareholders to share in both
the synergies and value creation of the proposed combination.
As we have stated previously, it is Westlake's desire to negotiate this
transaction with Georgia Gulf on a friendly basis. In order to move
forward, we need to immediately begin good faith negotiations towards a
mutually agreeable transaction. In furtherance of that, we are informing
you that we do not intend to nominate director candidates for election
at Georgia Gulf's annual meeting of stockholders in 2012.
We remain enthusiastic about a combination of Westlake and Georgia Gulf
and believe we can quickly reach agreement on a mutually acceptable
definitive agreement. Such agreement would be in customary form and
provide that consummation of the transaction would be subject only to
usual conditions for a transaction of this type, including necessary
approvals of governmental agencies, which we expect will be obtained in
a timely manner.
We would again ask you to move forward to achieve a transaction that
will benefit your shareholders. If the current Georgia Gulf Board is
unwilling to proceed based on our premium $35 proposal, we would be
prepared to negotiate with a Board that more closely reflects the views
of Georgia Gulf's shareholders -- many of whom favor moving forward
promptly with a combination of Georgia Gulf and Westlake.
With best regards,
President and Chief Executive Officer
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.
About Westlake Chemical Corporation
Corporation is an international manufacturer and supplier of
petrochemicals, polymers and building products with headquarters in
Houston, Texas. The company's range of products includes: ethylene,
polyethylene, styrene, propylene, caustic, VCM, PVC resin and PVC
building products including pipe, windows and fence. For more
information visit the company's web site at http://www.westlake.com.
Forward Looking Statements
Except for the historical
information contained herein, the matters discussed in this press
release are forward-looking statements that involve certain risks and
uncertainties. These risks and uncertainties relate to, among other
things, (i) successfully completing the proposed transaction or realize
the anticipated benefits of a transaction; (ii) obtaining Georgia Gulf
stockholder, antitrust, and other approvals for the proposed transaction
on the terms proposed and in a timely manner; (iii) achieving our
expected financial performance following completion of the proposed
transaction; and (iv) the risks and uncertainties inherent in the
petrochemicals, polymers and building products industries discussed in
our filings with the Securities and Exchange Commission (the "SEC").
Forward-looking statements, like all statements in this press release,
speak only as of the date of this press release (unless another date is
indicated). We do not undertake any obligation to publicly update any
forward-looking statements, whether as a result of new information,
future events, or otherwise.
This press release does not
constitute an offer to sell or the solicitation of an offer to buy any
securities or a solicitation of any vote, proxy or approval. No tender
offer for the shares of Georgia Gulf has been made at this time. This
press release relates to a potential business combination transaction
with Georgia Gulf proposed by Westlake. This press release is not a
substitute for any tender offer statement, proxy statement or any other
document which Westlake may file with the SEC in connection with the
proposed transaction. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ
ANY SUCH DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY IF AND
WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION. Any such documents will be
available free of charge through the website maintained by the SEC at www.sec.gov
or by directing a request to Westlake's Investor Relations Department,
Westlake Chemical Corporation, 2801 Post Oak Blvd., Houston, TX 77056,
telephone number (713) 960 9111.
Westlake, the directors and executive officers of Westlake, and other
persons may be deemed to be participants in any future solicitation of
proxies from Georgia Gulf shareholders in respect of the proposed
transaction with Georgia Gulf. Information regarding Westlake's
directors and executive officers is available in Westlake's Annual
Report on Form 10-K for the year ended December 31, 2010. Other
information regarding potential participants in such proxy solicitation
and a description of their direct and indirect interests, by security
holdings or otherwise, will be contained in future filings relating to
the proposed transaction.
Source: Westlake Chemical Corporation
Westlake Chemical Corp.
David R. Hansen, 713-960-9111
Verbinnen & Co
Jim Barron/Robin Weinberg, 212-687-8080
Steve Bender, 713-585-2643
Dan Burch/Charlie Koons, 800-322-2885