Axiall rejects Westlake bid

OREANDA-NEWS. February 02, 2016. Axiall's board of directors has rejected a \\$2.9bn bid from Westlake Chemical.

Houston-based Westlake, which produces olefins, styrene, polymers, resins, PVC and specialty building products, appealed to Axiall's shareholders to reconsider in an open letter today.

"In this challenging environment, we believe your unwillingness to even discuss our compelling proposal exposes your shareholders to significant risk and uncertainty," Westlake president Albert Chao said.

Axiall had no immediate comment.

Westlake operates a 290,000 t/yr cracker in Calvert City, Louisiana, in addition to another 1.3mn t/yr of ethylene capacity in Lake Charles, Louisiana. Westlake has acquired 4.4pc of Axiall's stock and retained Deutsche Bank and Goldman Sachs as financial advisors on the proposal.

The takeover bid comes as Axiall moves forward to build its own US ethylene feed capacity. In December Axiall reached a final investment decision to move forward with a new 1mn t/yr ethylene cracker in Lake Charles, Louisiana, as part of a joint venture with Lotte Chemical, a Korean based producer. That project is scheduled to begin operations in 2019.