Westlake Drops Its Bid For Georgia Gulf

Westlake Chemical has dropped its $1.2 billion bid to acquire rival polyvinyl chloride maker Georgia Gulf.

The hostile bid began in January, when Westlake made an unsolicited $30.00-per-share offer for the company. The bid represented a 23% premium over Georgia Gulf’s share price on Jan. 12, the eve of Westlake’s offer announcement.

Georgia Gulf’s board promptly rejected the offer, calling it “an opportunistic attempt to acquire the company’s uniquely positioned assets as we recover from an unprecedented downturn.” The board also rejected a sweetened, $35.00-per-share bid for the company on Feb. 1, on the grounds that it undervalued the company.

Westlake withdrew its bid on May 4 after confidential discussions with Georgia Gulf’s management. Georgia Gulf had earlier refused to talk about a merger.

“We are disappointed in this result,” Westlake Chief Executive Officer Albert Chao said in a statement. Westlake plans to sell the 4.8% stake in Georgia Gulf that it had acquired before it unveiled its unsolicited bid.

Georgia Gulf CEO Paul Carrico says shareholders are in no need of a buyout to make the company a good investment. “Georgia Gulf’s significant ability to leverage our access to low-cost U.S. shale gas and to benefit from continuing growth in global demand and the recovery of the U.S. housing market, combined with our highly integrated asset base and access to key export markets, places Georgia Gulf in an ideal position for the future,” he said.

Georgia Gulf’s share price tumbled 8%, to $31.50.