PPG Industries PPG today announced that it has commenced its exchange
offer related to the split-off transaction of its commodity chemicals
business. The split-off transaction is in connection with the separation and
merger of Eagle Spinco Inc., a wholly-owned subsidiary of PPG that will own
substantially all of the assets and liabilities of PPG's commodity chemicals
business, with a subsidiary of Georgia Gulf Corporation GGC. As
previously announced, PPG entered into definitive agreements as of July 18,
2012, to separate and merge its commodity chemicals business with Georgia
Gulf.
Key elements of the exchange offer:
* PPG shareholders have the option to exchange all, some or none of their
shares of PPG common stock for shares of Eagle Spinco common stock,
subject to proration as described below. Shares of Eagle Spinco common
stock will convert automatically into the right to receive shares of
Georgia Gulf common stock at the closing of the merger of a Georgia Gulf
subsidiary with and into Eagle Spinco, which is expected to occur promptly
after completion of the exchange offer.
* Tendering PPG shareholders are expected to receive approximately $1.11 of
Georgia Gulf common stock for every $1.00 of PPG common stock tendered,
subject to the upper limit described below.
* PPG will determine the prices at which shares of PPG common stock and
shares of Eagle Spinco common stock (and ultimately Georgia Gulf common
stock) will be exchanged by reference to the simple arithmetic average of
the daily volume-weighted average prices of PPG common stock and Georgia
Gulf common stock, respectively, on the New York Stock Exchange on each of
the last three trading days of the exchange offer.
* PPG currently expects to issue approximately 35,236,010 shares of Eagle
Spinco common stock in the exchange offer. The exact number of shares of
Eagle Spinco common stock to be issued will be equal to the greater of
35,200,000 or 1.02020202 times the number of shares of Georgia Gulf common
stock outstanding immediately prior to the merger. The number of shares of
PPG common stock that will be accepted in the exchange offer will depend
on the final exchange ratio, the number of shares of Eagle Spinco common
stock offered and the number of shares of PPG common stock tendered. Based
on recent trading prices of the PPG common stock and the Georgia Gulf
common stock, and assuming the issuance of 35,236,010 shares of Eagle
Spinco common stock, if the exchange offer were fully subscribed,
approximately 9,973,679 shares of PPG common stock would be accepted for
exchange in the exchange offer.
* The exchange offer and withdrawal rights are scheduled to expire at 8:00
a.m., New York City time, on January 28, 2013, unless the exchange offer
is extended or terminated.
The exchange offer is designed to permit PPG shareholders to exchange their
shares of PPG common stock for shares of Eagle Spinco common stock at a
discount of 10 percent to the per-share value of Georgia Gulf common stock,
subject to a limit of 3.9745 shares of Eagle Spinco common stock per share of
PPG common stock. Each share of Eagle Spinco common stock will then convert
automatically into the right to receive one share of Georgia Gulf common stock
following the merger of the Georgia Gulf subsidiary with and into Eagle
Spinco. The shares of Georgia Gulf common stock issued in the merger are
expected to represent approximately 50.5 percent of the Georgia Gulf common
stock that will be outstanding after the merger.
If the exchange ratio limit of 3.9745 shares of Eagle Spinco common stock per
share of PPG common stock is reached as of the initial expiration of the
exchange offer, then the exchange offer will be subject to a mandatory
extension of two trading days, as described in the exchange offer materials
being sent to PPG shareholders.
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