PPG Industries (NYSE: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 (NYSE: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.
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.
The final exchange ratio showing the number of shares of Eagle Spinco common stock that PPG shareholders participating in the exchange offer will receive for each share of PPG common stock accepted for exchange will be announced by news release no later than 4:30 p.m., New York City time, on the last trading day prior to the expiration date (unless the exchange offer is extended). The exchange offer will expire at 8:00 a.m., New York City time, on January 28, 2013, unless terminated or extended, and the closing of the merger of the Georgia Gulf subsidiary with and into Eagle Spinco is expected to occur promptly after completion of the exchange offer. The transactions are subject to customary closing conditions, including Georgia Gulf stockholder approval. Georgia Gulf has scheduled a special meeting of shareholders to be held on January 10, 2013, to approve the issuance of Georgia Gulf common stock in the transaction. As a result of the exchange offer, the number of PPG’s outstanding shares will be reduced.
The exchange offer will be subject to proration if the exchange offer is oversubscribed, and the number of shares PPG accepts in the exchange offer may be fewer than the number of shares tendered.
Source: PPG Industries