Industrials
Westlake and Axiall Merger: A Swing and a Miss
Published:
Last Updated:
Westlake Chemical Corp. (NYSE: WLK) and Axiall Corp. (NYSE: AXLL) made waves in the market Friday morning on news of a failed acquisition. Westlake announced that it submitted a proposal to acquire all outstanding shares of Axiall for $20 (comprised of $11 in cash and 0.1967 of a Westlake share). Despite the fact that Axiall turned down the deal, investors are starting to value this company a lot higher than originally thought.
The proposal, which has been summarily rejected by the Axiall board, represented a significant premium of 108% to Axiall’s closing price of $9.60 on January 22. The total value of the proposed transaction is approximately $2.9 billion, including the assumption of certain Axiall liabilities, which include approximately $1.5 billion of debt outstanding as of the end of September 2015.
But just because Westlake was rejected this time does not mean it will not try again. Perhaps a hostile takeover could be in the cards.
Albert Chao, Westlake’s president and CEO, commented:
We are surprised and disappointed by Axiall’s summary rejection of our proposal, which provides Axiall shareholders with a significant premium and upside potential via their participation in the increased scale and synergies of the combined company. The combined company would be more diversified and have a stronger financial profile than Axiall, providing it with significant financial and operational flexibility, a greater ability to serve its customers, and improved ability to capitalize on future investment opportunities.
24/7 Wall St.Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Editors' Picks
