Westlake has a rival as it tries to acquire Atlanta company
Houston-based Westlake Chemical Corp. may find itself in a bidding war as a South Korean company has made an offer for Axiall Corp., a maker of vinyl and polyethylene that Westlake is trying to buy.
While South Korea’s Lotte Chemical Corp. didn’t disclose terms of the possible deal, the enterprise value of Axiall may be close to $3.1 billion, according to a report Tuesday by RBC Capital Markets, which didn’t say where it got the information. That works out to $27.40 a share, compared with an offer of $23.35 from Westlake Chemical, RBC said.
Axiall stock surged as much as 11 percent after news of Lotte’s offer, the biggest intraday gain since the Westlake bid was disclosed Jan. 29. Axiall’s shares closed at $25.35 a share, up $2.05, or nearly 9 percent.
Axiall, headquartered in Atlanta, is casting about for suitors as Westlake tries to replace nine of the target company’s directors with its own nominees in a June 17 proxy contest. After Westlake’s unsolicited January bid was rejected, the company sweetened the offer in March. Axiall said the price was still too low, and the two sides blame each other for ending talks.
“The acquisition price may go higher as Lotte has to compete with Westlake,” said Lee Ji Yeon, an analyst at IBK Securities. “In terms of diversifying its business, it’s good news for Lotte.”
Axiall and Westlake didn’t return requests for comment.
Lotte formed a venture with Axiall last year to build a Lake Charles, La., plant for making ethylene in the U.S., with production to start in 2018. The South Korean company submitted a plan to acquire Axiall on June 3, according to a regulatory filing.
The petrochemical business of South Korea’s Lotte conglomerate is widening its product lines and seeking growth outside the country after announcing the purchase of Samsung Group’s chemicals business for about $2.5 billion.
Axiall would expand Lotte Chemical’s products to include polyvinyl chloride and chloro-alkali, while helping secure a foothold in the U.S. market, the South Korean company said Tuesday in a statement.