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What: Shares of chemical maker Axiall Corp (NYSE: AXLL) jumped as much as 11.2% on Tuesday after getting an unsolicited buyout bid. Shares settled to a 9.4% gain by 11:00 a.m. EDT.
So what: South Korean conglomerate Lotte Chemical Corp made a bid of $2.6 billion for the company, according to The Wall Street Journal. This is on top of the proxy battle Westlake Chemical Corp is already waging against Axiall, which has spurned its buyout offers.
With the bidding war heating up, shares are on the rise, but management doesn't seem very keen on selling the company. Shares are still off 36% from their 52-week high and management thinks there's even more long-term value than current offers suggest.
Now what: It could be hard for Axiall's management to keep fighting off buyout offers with shares stuck where they are. They'll have to prove to investors that operations are improving faster than the market is pricing into shares right now.
While I wouldn't speculate on an acquisition taking place, the interest from buyers has to be reassuring for shareholders bullish on the stock. It could lead to a further bidding war if management does decide that selling the company is the best move.
