 "Westlake makes hostile bid to acquire Axiall")
Taking a step to further bolster its unsolicited bid to acquire Axiall, Westlake Chemical Corporation has notified Axiall Corporation, a leading global player in chlorovinyls and aromatics chemicals, of its intention to nominate ten independent directors to the Axiall’s board at the company’s 2016 annual meeting, which has yet to be scheduled. In 2015, the Axiall annual meeting was held on May 19.
On January 29, 2016, Westlake, the manufacturer petrochemicals, polymers and building products, proposed to acquire Axiall for $20 per share (comprised of $11 in cash and 0.1967 of a Westlake share, which represented a value of $9 based on Westlake's closing price on January 22, 2016). The total value of the proposed transaction is approximately $2.9 billion, including the assumption of certain Axiall liabilities, which include approximately $1.5 billion of debt outstanding as of September 30, 2015. However, Axiall Board summarily rejected the Westlake proposal.
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Making a strong pitch for the proposal, Albert Chao, Westlake's president and chief executive officer, said, "We have heard from many Axiall shareholders who have expressed their desire for Axiall to engage in discussions with us regarding our 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. 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.”
He added, “Given Axiall's position, we believe that Axiall shareholders would be better served by our independent and highly qualified nominees, who are committed to acting in the best interests of all Axiall shareholders. Our nominees have the necessary track-record, strategic vision and experience to maximise shareholder value. 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.”
Westlake Chemical Corporation manufactures a range of products such as ethylene, polyethylene, styrene, propylene, caustic, VCM, PVC suspension and specialty resins and PVC building products including pipe and specialty components, windows, fence, deck and film.
