AkzoNobel rejects third takeover offer from PPG Industries

Dutch paints-and-chemicals company Akzo Nobel has declined U.S. peer PPG Industries’ revised takeover offer saying it will instead implement its own strategy for the benefit of shareholders

Dutch paints-and-chemicals company Akzo Nobel has declined U.S. peer PPG Industries’ revised takeover offer saying it will instead implement its own strategy for the benefit of shareholders

Dutch paint maker Akzo Nobel NV's supervisory board is scheduled to meet on Tuesday to discuss how to proceed after deeming PPG Industries 's latest $29 billion offer to be insufficient, people familiar with the matter said.

Akzo has said that the bids undervalued the company and, until this past weekend, refused to sit down with PPG.

PPG now has until June 1 to decide if it wants to table a formal bid without the support of Akzo's board, effectively turning the takeover attempt hostile.

AkzoNobel explained that the decision was taken after a careful consideration and an extensive review process by its supervisory and management board with the PPG board members.

However, he said: "The PPG proposal undervalues AkzoNobel, contains significant risks and uncertainties, makes no substantive commitments to stakeholders and demonstrates a lack of cultural understanding".

Most analysts say Akzo's independence plan cannot match a PPG takeover in terms of financial value.

PPG has not yet given a response to the rejection of their third bid.

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AkzoNobel's share price was down 2.4 percent at 77.50 euros ($84.82) late Monday morning compared to its previous close, but had edged up by 0.6 percent since the Amsterdam stock exchange opened.

"PPG's failure to provide such guarantees. creates widespread anxiety and uncertainty for thousands of jobs across AkzoNobel's 46,000-strong workforce", it said. It will also sell or float the company's chemicals business, representing about a third of sales and profits, within 12 months.

Elliott Advisors, which holds a 3.25-per cent stake, had teamed up with other institutional investors like asset manager Columbia Threadneedle, Causeway Capital, Franklin Templeton, Henderson, Harris Associates and Southeastern Concentrated Value, all holding a combined more than a 10-per cent stake, to convene an extraordinary shareholders' meeting to oust chairman Antony Burgmans for refusing to enter into talks with PPG.

During voting at the meeting, about a third of shareholders opposed a resolution allowing management to issue shares this year.

Most analysts say Akzo's independence plan can not match a PPG takeover in terms of financial value but Buechner and Burgmans have said it is hard to objectively measure other stakeholder interests.

This is because Akzo is concerned that engaging with PPG in comprehensive deal negotiations would weigh on its prospects of getting PPG to improve on its offer much more, according to the sources.

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