Westlake Chemical drops bid to buy Georgia Gulf(2)
Westlake Chemical Corp. said Friday that it withdrew a $1.2 billion offer to buy Georgia Gulf Corp. and will sell its stock in the company.
Shares of Georgia Gulf tumbled nearly 10 percent in after-hours trading, while Westlake stock gained.
Houston-based Westlake said it made the decision after discussing the bid with Georgia Gulf, another chemical maker, under a confidentiality agreement.
"We are disappointed in this result, but we continue to work on our previously announced important strategic initiatives as well as to look for other opportunities to grow our business," said Westlake CEO Albert Chao.
Georgia Gulf did not immediately return phone calls requesting comment.
Westlake launched a hostile bid for Georgia Gulf in September and increased its price in February from $30 per share to $35 per share, but Georgia Gulf's board spurned the offer, which was nearly identical to the price of Georgia stock at the time.
Westlake tried to strike a more conciliatory tone, deciding against nominating directors to Georgia Gulf's board to pave the way for what it hoped would be friendly buyout discussions.
Atlanta-based Georgia Gulf makes chemicals and vinyl-based products for construction and home-improvement jobs. Westlake makes petrochemicals and other products.
Shares of Georgia Gulf fell $1.05, or 3 percent, to $34.26 in regular trading, and another $3.31, or 9.7 percent, to $30.95 in after-hours trading.
Westlake shares rose $2.99, or 5 percent, to close at $56.70, then gained an extra 67 cents to $57.37 in extended trading.