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UPDATE 2-Westlake Chemical may withdraw Georgia Gulf offer
February 21, 2012 / 11:25 AM / 6 years ago

UPDATE 2-Westlake Chemical may withdraw Georgia Gulf offer

* Q4 EPS $0.40 vs est $0.62

* Q4 rev up 8 percent at $859.2 mln vs est $835.4 mln

Feb 21 (Reuters) - Westlake Chemical Corp threatened to withdraw its sweetened $1.9 billion offer for Georgia Gulf, more than a month after the commodity chemicals maker made a bid for its smaller peer.

Earlier this month, Westlake raised the unsolicited bid by about 17 percent to $35 per share, but Georgia Gulf said it could produce more value for investors on its own.

“We know what Georgia Gulf is worth. We have not withdrawn our proposal so far. However, at some point if we do not see a real change in approach from management, we likely will,” Westlake Chief Executive Albert Chao said on a conference call with analysts.

Westlake’s shares fell 1 percent to $59.67 and Georgia Gulf’s 3 percent to $33.49 on Tuesday on the New York Stock Exchange.

WEAK Q4 PROFIT

Earlier in the day, Westlake posted a drop in fourth-quarter profit, which missed analysts’ expectations for the first time in seven quarters, as higher feedstock costs outpaced sales price increases.

The net profit fell 69 percent to $26.4 million, or 40 cents a share. Analysts on average had expected 62 cents a share, according to Thomson Reuters I/B/E/S.

For 2012, Westlake forecast a two-fold rise in capital expenditure at $400 million to $450 million.

Income at the olefins segment -- the company’s largest -- halved in the fourth quarter, while its vinyls segment posted a loss.

Olefins, like ethylene and propylene, are basic chemicals made from oil or natural gas liquid feedstocks and commonly used to manufacture plastics and gasoline, among others.

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