Westlake Chem attempting hostile takeover of Axiall

After local company Axiall Corp. rejected their unsolicited US$1.4 bln merger offer in late January, Westlake Chemical Corp., located in Sulphur, made overtures directly to Axiall’s shareholders, thus launching an attempt at a US$2.9 bln hostile takeover. On Tuesday, February 16, Albert Chao, Westlake’s president and CEO, released a statement offering to Axiall shareholders a slate of “independent and highly qualified nominees, committed to acting in the best interests of all Axiall shareholders,” to replace Axiall’s current board of directors. “We have heard from many Axiall shareholders who have expressed their desire for Axiall to engage in discussions with us regarding our proposal,” he said. In a return statement issued Wednesday, February 17, Axiall stated they viewed the board nominations to be an “attempt to force a sale of Axiall to Westlake at a price that significantly undervalues Axiall’s assets and its long-term prospects.” The statement further questioned the proposed members’ “independence” and charged that, “if elected to the Axiall board, Westlake’s nominees would have inherent conflicts given Westlake’s focus on acquiring Axiall.” The initial offer from Westlake Chemical Corporation, made public January 29 and delivered to Axiall January 25, was for the acquisition of all of the outstanding common shares of Axiall at $20 per share in the form of $11 in cash and 0.1967 shares of Westlake stock. After a review by Axiall’s board and financial and legal advisors, Timothy Mann, Axiall president and chief executive officer, issued the following statement: “We believe that Westlake’s proposal is an opportunistic attempt to take advantage of challenging public equity market conditions and significantly undervalues Axiall’s assets and its long-term prospects. The price of Axiall stock was at $20.18 as recently as Dec. 1, 2015. We remain committed to achieving our $100 million run rate cost reduction and productivity target by the end of 2016.” In October of 2014, Axiall Corporation announced plans for a $3 billion ethylene production facility and adjacent mono-ethylene glycol plant near the Maplewood area of Sulphur. Mann addressed that also. He said Axiall is also committed to “our investment in the LACC ethane cracker project with our joint venture partner Lotte Chemical.” The project is on track for breaking ground in 2019. Axiall representative Chip Swearngan said on Friday, February 19, that the company can say no more about the project than what was stated by Mann. “We can’t speculate on the what-ifs,” he said. “Beyond (Mann’s statement), we are not at liberty to say.”