US Axiall re-opens books as Westlake mulls new bid

HOUSTON (ICIS)–Westlake Chemical and Axiall circled each other a little closer this week after Axiall said it would re-open its financial information to inspection by Westlake executives and invite the company to revise its takeover proposal, the companies said in filings with the Securities and Exchange Commission on Monday.

Axiall has twice rejected outright what have become Westlake’s hostile takeover attempts, once in March and a revised proposal offered in April.

Both companies make chlorine and polyvinyl chloride (PVC). Westlake additionally makes polyolefins and is back-integrated to ethylene feedstock for all of that production. Axiall is not integrated to ethylene and has sold some of its building products business, reducing its downstream integration.

Westlake has responded by nominating nine candidates for Axiall’s board of directors ahead of the company’s annual shareholder meeting, now scheduled for 17 June.

Westlake has complained that Axiall’s sloughing off of assets is undermining the company’s value even as it has refused to seriously consider Westlake’s proffers.

In January, as Axiall shares drifted as low as $9.19, Westlake offered $20 per outstanding share. The $2.9bn cash and stock offer was summarily rebuffed, though Axiall shares immediately rose to $18-19/share.

The second offer included $14/share in cash plus 0.1967 of a Westlake share, bringing the total to $23.35/share at the time.

Axiall has said that the proposal fails to recognise the $270m in synergies that the combined venture would enjoy.

On Monday, Westlake said it would accept the Axiall invitation to examine company information further and to revise or reaffirm its current offer by the stated deadline of 3 June.

Axiall shares traded slightly higher after the announcement, at $22.87 at midday, 58 cents higher than the opening.

(Photo: Axial makes vinyl. Source: Monkey Business Images/REX/Shutterstock)