Axiall Corp. has become embroiled in a proxy fight with a Houston firm after the Atlanta chemicals and building products company rejected two takeover offers in the last three months.
Westlake Chemical Corp. broke off deal talks and proposed its own slate of 10 nominees for Axiall's board of directors this week after Axiall rejected a $3.1 billion cash-and-stock offer.
Westlake, which is controlled by the billionaire Chao family, had initially offered roughly $1.4 billion in cash and stock in January for Axiall, arguing that the companies’ combined chemicals and vinyl businesses would be financially stronger and better diversified than as standalone companies.
Axiall rejected that offer, saying it was an “opportunistic” move to buy its vinyls business and other assets cheaply.
Atlanta could end up the loser if the corporate brawl ends with a deal. Only about 200 of Axiall’s 6,000 employees work at its Sandy Springs headquarters, while most of the two companies’ operations are in other states.
Axiall has been under pressure from its largest investors to consider selling off parts of the company or to consider a merger.
Last year, Axiall sold two chemical plants in Texas. The company, which plans to cut $100 million from its operating expenses by year-end, said it is considering selling its building products business, which accounts for about half of its employees.
Axiall, which changed its name from Georgia Gulf after a 2013 merger, operates several plants in Louisiana, Mississippi and elsewhere that produce industrial chemicals and building materials such as PVC pipe and vinyl siding.
Axiall said Thursday that Westlake's latest offer "does not fairly reflect the high quality of the company's assets, the significant growth potential of the company's business and the powerful synergies" that could come from the merger.
It estimated that the combination would allow about $270 million in cost savings, well above Westlake’s target of $60 million.
Axiall said its expects to schedule an annual shareholder meeting soon.
Originally named Georgia Gulf, the company was spun off from Georgia Pacific in 1984. It was renamed Axiall Corp. after merging with Pittsburgh-based PPG’s chemical business in 2013.
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