Published: Thu, May 11, 2017
Economy | By Melissa Porter

Elliott launches legal action to oust Akzo Nobel chaiman

Elliott launches legal action to oust Akzo Nobel chaiman

Amsterdam-based paints and coatings group AkzoNobel has rejected the third takeover bid by its U.S. peer PPG Industries, the Financieele Dagblad reported on Monday.

He said: "It undervalues AkzoNobel, contains risks and uncertainties, makes no substantive commitments to stakeholders and demonstrates a lack of cultural understanding".

Buechner told to the reporters that on Saturday, he and Antony Burgmans, chairman of Akzo, met with PPG CEO Michael McGarry, but would not provide any details of what was discussed, saying only that it was "cordial and respectful". Akzo shares were trading 0.1 percent higher at 76.88 euros on Tuesday. Akzo Nobel shares fell 2.8pc to €77.16 as of 12.37pm in Amsterdam, the lowest since April 3.

PPG has already said that it plans to submit a formal offer to the Dutch financial markets regulator by 1 June.

The US rival had raised the offer for the Dutch company to €96.75 per share, an eight percent increase on the previous offer.

This means that PPG would approach AkzoNobel shareholders - almost 50% are American - directly. Indeed they opened proceedings by saying they were not there to negotiate.

A statement from PPG said: "PPG is disappointed that AkzoNobel has once again refused to enter into a negotiation regarding a combination of the two companies, ignoring the best interests of its stakeholders, including long-term shareholders who overwhelmingly support engagement".

Akzo believes that PPG's third acquisition bid, which was unveiled on April 24, still does not value the company highly enough, especially in light of Akzo's plans to unlock value by exploring a spin-off or sale of its specialty chemicals business, and the risks it sees in the potential deal, it is understood. It hasn't yet said whether it would agree to hold an extraordinary meeting.

Akzo spokesman Leslie McGibbon said Elliott's decision to go to court was "incredibly disappointing".

After extensive consideration, the company has concluded that the interests of shareholders and other stakeholders are best-served by its own strategy to accelerate growth and value creation.

The strategy included plans to shed its specialist chemicals division and comes after it was buoyed by stronger-than-expected 2017 first quarter profits.

But AkzoNobel has been under pressure in the increasingly hostile battle with the Pittsburg-based PPG.

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