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Strategies & Market Trends : Speculating in Takeover Targets
CTG 7.075-2.5%3:59 PM EST

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To: richardred who wrote (2951)1/13/2012 10:35:22 AM
From: richardred  Read Replies (1) of 6521
 
Olin up a bit in response to the Georgia Gulf hostile bid by Westlake. I see some chemicals being attractive as targets do to the low price of Natural gas.
naturalgas.org

Westlake Chemical Makes $1 Billion Unsolicited Bid for Georgia Gulf By KEVIN ROOSE
Westlake Chemical, a manufacturer of raw materials used in plastics, has made an unsolicited bid to acquire Georgia Gulf, a commodity chemicals maker, for $30 pa share.

The all-cash bid, which would value Georgia Gulf at around $1 billion, would create one of the largest manufacturers of olefins, vinyls and other materials used in construction and other industries. It represents a 23 percent premium over Georgia Gulf’s stock price, which closed at $24.48 on Thursday.

Westlake first made a $30 per share bid for Georgia Gulf in September, but the Atlanta-based manufacturer rejected the offer. It tried again in December, meeting with Georgia Gulf’s management to discuss a potential acquisition. But the company “continued to insist on a standstill arrangement,” according to Westlake, which made the terms of its offer public for the first time Friday.

“We believe that our proposal represents a unique opportunity to deliver significant and immediate value to Georgia Gulf stockholders,” said Albert Chao, Westlake’s chief executive, said in a statement. “As such, we are surprised and disappointed that Georgia Gulf’s management has been unwilling to engage in substantive discussions with us.”

In lieu of a takeover, Westlake has made advances on its target, buying nearly 5 percent of Georgia Gulf’s stock. It said Friday that it hopes to meet with Georgia Gulf and its legal and financial advisors “at any time and in any location” to discuss its acquisition offer.

“As we have stressed since our initial correspondence in September, we very much prefer to negotiate a transaction with Georgia Gulf, but we have determined that making your stockholders aware of our proposal is necessary,” Mr. Chao wrote in a letter to Georgia Gulf’s board of directors, which was included in the release.

Westlake has retained Deutsche Bank Securities and Morgan Stanley as financial advisors, and Vinson & Elkins and Morris, Nichols, Arsht & Tunnell LLP as legal advisers.

A Georgia Gulf spokesman was not immediately available for comment. Georgia Gulf’s stock was trading sharply up on the news of Westlake’s bid, around $33 per share.

dealbook.nytimes.com
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