Westlake +12% on plans for ethylene unit MLP

Westlake Chemical (WLK +12.2%) surges on news is spinning out a newly formed MLP subsidiary to operate, acquire and develop ethylene production facilities.

With the spinoff of the ethylene business, WLK says it will focus on more specialized chemicals since ethylene is a key petrochemical building block for more of the specialty chemicals it produces.

In Westlake Chemical Partners’ IPO filing, the company says it intends to raise $272M in its IPO.

The MLP may be worth ~$85/share, says an Alembic Global analyst, who says it also would retain assets for making ethylene-derived plastics, including polyethylene and polyvinyl chloride, which would boost valuation further.

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