$1.1 Billion Proposal Provides Immediate and Significant Premium
to Georgia Gulf Shareholders
HOUSTON--(BUSINESS WIRE)--Jan. 13, 2012--
Westlake Chemical Corporation (NYSE: WLK) announced today that it has
submitted a proposal to Georgia Gulf Corporation (NYSE: GGC) to acquire
all of the outstanding shares of Georgia Gulf for $30.00 per share in
cash. The proposal represents a 51% premium to Georgia Gulf’s 30-day
volume-weighted average share price of $19.82. Westlake’s proposal is
not subject to a financing condition. Westlake expects the transaction
would be accretive to earnings in the first fiscal year after the close
of the transaction. Westlake also noted that it has acquired shares
representing approximately 4.8% of the outstanding common shares of
Georgia Gulf.
The combination of Westlake and Georgia Gulf would create one of the
leading North American olefins, vinyls, and building products producers,
with increased scale in the growing global vinyls market and with
additional growth opportunities. Acquiring Georgia Gulf would enable
Westlake to become a leading PVC resins producer and vinyl-based
building products supplier, and would provide Westlake with
opportunities to expand its global product offerings.
Albert Chao, Westlake’s President and Chief Executive Officer, said, “We
believe that our proposal represents a unique opportunity to deliver
significant and immediate value to Georgia Gulf stockholders. As such,
we are surprised and disappointed that Georgia Gulf’s management has
been unwilling to engage in substantive discussions with us.
“Since the initial delivery of our proposal on September 20, 2011, we
have made numerous attempts to engage in meaningful dialogue with
Georgia Gulf and have expressed our willingness to explore, pursuant to
a customary confidentiality agreement, whether opportunities exist that
would justify increasing our proposal price. However, Georgia Gulf has
been unwilling to provide us with information that would allow us to
explore these opportunities or to enter into substantive discussions. We
urge the Georgia Gulf Board to act in the best interests of its
shareholders by meeting with us to seriously discuss our compelling
proposal,” Mr. Chao continued.
In a letter sent to Georgia Gulf today, Westlake stressed that it would
prefer a negotiated transaction with Georgia Gulf, but stated that it
has determined that this step was now necessary. 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.
Below is the full text of the most recent letter sent from Westlake to
Georgia Gulf:
January 13, 2012
Board of Directors
|
Georgia Gulf Corporation
|
115 Perimeter Center Place
|
Suite 460
|
Atlanta, GA 30346
|
Attention: Mr. Mark Noetzel, Chairman of the Board
Dear Members of the Board:
We are disappointed by your continued rejection of our proposal to
acquire all of the outstanding shares of Georgia Gulf Corporation
(“Georgia Gulf”) for $30.00 per share in cash, which we first offered on
September 20, 2011. The $30.00 per share offer price represents a
significant 66% premium to Georgia Gulf’s volume-weighted average
closing share price of $18.02 since our initial offer. Notwithstanding
our compelling proposal and our repeated attempts at engagement, you
have been unwilling to discuss value or to commence negotiations with us
despite the opportunity to provide your stockholders with immediate
liquidity at a sizeable premium in an uncertain economic environment.
Since we first made our proposal, your stock has traded as low as $12.84
per share, yet we have confirmed our $30 per share offer without a
financing condition and you have not engaged.
We held out some hope that our meeting with Georgia Gulf management on
December 22, 2011, would finally allow the parties to have a serious
dialogue about our proposal. After all, we have for months expressed our
willingness to explore with you, pursuant to a customary confidentiality
agreement, whether opportunities exist that would justify increasing our
offer to make it even more attractive to the Georgia Gulf stockholders.
Unfortunately, rather than taking the opportunity to demonstrate
additional value or enter into substantive discussions, you continued to
insist on a standstill arrangement that would unreasonably restrain your
stockholders’ ability to timely consider our proposal. Moreover, you
have insisted on this restrictive standstill arrangement without any
commitment on your part to respond to requests for information or to
negotiate with us in good faith. Asking for such a constraint without
providing us any reason to believe you would support a transaction at
any price is untenable from our perspective, and we suspect your
stockholders would share this perspective too.
Consequently, we have decided to make the terms of our all-cash proposal
public. Given the significant premium and near term liquidity, we are
confident that Georgia Gulf’s stockholders will enthusiastically embrace
it.
We have put considerable time and resources into evaluating this
transaction and developing our proposal. Our board of directors supports
it and we have sufficient cash and borrowing capacity to fully fund this
cash transaction. We are committed to completing a transaction with
Georgia Gulf and we stand ready to meet and discuss next steps towards a
mutually beneficial negotiated transaction with you and your financial
and legal advisors at any time and in any location. 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. We already
have acquired shares representing approximately 4.8% of the outstanding
common shares of Georgia Gulf. We also have engaged Deutsche Bank
Securities Inc. and Morgan Stanley & Co. LLC as our financial advisors,
Vinson & Elkins LLP and Morris, Nichols, Arsht & Tunnell LLP as our
legal advisors, MacKenzie Partners, Inc., and other advisors in relation
to this transaction.
We look forward to speaking to you and your stockholders about our
attractive proposal to combine Westlake and Georgia Gulf.
Sincerely yours,
Albert Chao
|
President and Chief Executive Officer
|
About Westlake Chemical Corporation
Westlake Chemical 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’ 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.
Additional Information
This communication 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 material 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
Media Inquiries:
Westlake Chemical Corp.
David R. Hansen,
713-960-9111
or
Sard Verbinnen & Co
Jim Barron /
Robin Weinberg, 212-687-8080
jbarron@sardverb.com
/ rweinberg@sardverb.com
or
Investor
Inquiries:
Westlake Chemical Corp.
Steve Bender, 713-585-2643
or
MacKenzie
Partners
Dan Burch / Charlie Koons, 800-322-2885
dburch@mackenziepartners.com
/ ckoons@mackenziepartners.com