Cash Purchase of Georgia Gulf Announced by Westlake Chemical
Shareholders of Georgia Gulf (GGC) are poised to benefit from more than $1.1 Billion in its purchase plan to Westlake Chemical Corporation (WLK). Westlake Chemical bared today that it has submitted a firm proposal to Georgia Gulf Corporation to buy all of its outstanding shares in cash at $30 per share. The purchase plan calls for an over 50 percent premium to Georgia Gulf shares with a 30-day volume-weighted average of $19.82, and is free from any financing arrangement.
Westlake looks forward to earnings immediately after consummation of the sale. It is also important to note that Westlake has taken some 4.8 percent of the outstanding common shares of Georgia Gulf.
The merger of the two companies would effectively create one of the biggest producers of olefins, vinyls, and other building products in North America and would open up larger markets and growth opportunities in the territory. The acquisition would also make Westlake Chemical a leader in PVC resin production and vinyl-founded products supply and distribution.
According to Albert Chao, Westlake President and CEO, management believes the proposal features a very good opportunity to deliver meaningful and urgent value to the stockholders of Georgia Gulf and he is both surprised and disappointed that the management of Georgia Gulf has been aloof to substantive discussions with them.
Needless to say, Georgia Gulf stocks rose immediately after the announcement was made, gaining over 30% in just one day. Notably, Westlake Chemicals also gained over 5%, surpassing the $50 mark for the first time since August 2011 and closing on the $55 resistance level.