Westlake has upped the ante in its bid for Axiall, announcing Tuesday that it will take its acquisition proposal to Axiall’s shareholders by nominating a completely new board of directors at the company’s 2016 annual meeting.
Albert Chao, Westlake’s president and CEO, says many Axiall shareholders have expressed a desire for Axiall to enter discussions. “The nominations give Axiall shareholders an opportunity to voice their disappointment with Axiall’s refusal to engage in discussions with us regarding our proposal,” he says.
Westlake announced a proposal on 29 January to acquire Axiall for $20/share, comprising $11/share in cash and 0.1967 of a Westlake share. The deal values Axiall at $2.9 billion, including the assumption of $1.5 billion of debt.
Axiall has not yet announced the date of its annual meeting.
Westlake has named 10 industry veterans to its slate. They include Michael Campbell, former chairman and CEO of Arch Chemicals; Charles Crew, former president and CEO of Sabic Innovative Plastics; Ruth Dreessen, managing director of Lion Chemical Capital, former director of Axiall predecessor Georgia Gulf, and former senior v.p. and CFO of Westlake; and Randy Woelfel, former CEO of Nova Chemicals.
Chao says Axiall would be better served by Westlake’s “independent” nominees. “We believe [the nominees] will consider our proposal in an independent manner and in accordance with their fiduciary duties.”
In its response to the latest announcement, Axiall reiterated its position that Westlake’s bid “significantly undervalues Axiall’s assets and its long-term prospects,” noting that shares in the company had traded at values greater than $20 for over 90% of the last three years.
Axiall questioned the independence of Westlake’s slate and defended the current board. “The Axiall board is composed of ten highly qualified directors, eight of whom are independent, and all of whom are elected annually,” says the company. “Axiall’s board members bring significant and broad industry expertise across a range of disciplines that are critical to Axiall’s business, particularly in chemicals, and consumer and industrial products, including substantial hands on experience in the chlor-alkali businesses. Since 2012, Axiall has appointed five new directors, each of whom brings a fresh perspective to the board.”
By Clay Boswell
Source: Chemical Week
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