Axiall more open to a deal

The hostile takeover bid by Houston-based Westlake Chemical to acquire Atlanta’s Axiall Corp. could become a bit more amicable now that Axiall is expressing a new openness to considering revised offers.

Westlake President and CEO Albert Chao has coveted the Atlanta-based Axiall for years, and launched a proxy battle to replace Axiall board members who have blocked Westlake’s bid with his own slate of candidates. Axiall’s shareholders meet June 17.

Axiall’s chief financial officer, Gregory Thompson, has asked Westlake to submit a new offer by June 3, Westlake said Monday. Axiall rejected an initial $1.4 billion offer from

Westlake in January, then a subsequent $1.6 billion bid.

The two petrochemical companies are competitors that make plastics, vinyls, building materials and other products.

Westlake previously made a run at buying the company in 2012, when it was still called Georgia Gulf Corp. Westlake reported revenues of more than $1 billion last year, compared to $755 million for Axiall.

“The Westlake guys are very serious,” said Hassan Ahmed, an analyst at New York equity research firm Alembic Global Advisors. “It’s very different from 2012. The difference is this time they actually assembled a board. That’s a painstaking process.”

Axiall said its leaders remain open to continuing negotiations, but they believe Westlake’s offers thus far are inadequate. Westlake said it will either submit a new offer or reaffirm the previous offer of $23.35 per share, or $1.6 billion. Westlake would also assume $1.5 billion in Axiall debt.

Westlake first made the offer in January, when Axiall’s stock fell below $10 a share. Axiall’s stock surged when Chao soon after disclosed the offer rejected by Westlake, and it closed Monday at $22.65 a share, up 36 cents on the day.

Ahmed said Westlake is in a position of strength as it heads toward the proxy vote. Axiall shareholders are frustrated by the company’s under-performance in recent years, Ahmed said, and many are open to a deal if Westlake increases its offer to more than $25 per share.

Westlake started with low-ball numbers, so a stronger offer will be needed to close the deal, he said.

“Westlake has a far better track record of managing assets,” Ahmed added.

Earlier this year, it looked like the WestlakeAxiall saga would play out as it had in the past, with the bid becoming hostile, but ultimately failing. Four years ago, Georgia Gulf Corp., which became Axi- all in 2013, rejected offers of $1 billion and $1.2 billion before Westlake withdrew its bid.

But the proxy fight changes things, said Ahmed. “Something is definitely going to happen.”