AkzoNobel rejects 2nd offer by PPG; pushed to consider by investors


Dutch speciality chemicals firm AkzoNobel, which has rejected the second takeover bid by compatriot PPG, is now being called by its investors and shareholders to reconsider.

Elliott Advisors, the activist investor that has a 3.25% stake in AkzoNobel, plus Causeway Capital Management, its largest shareholder, have turned up the heat. Elliott said it commissioned UK-based shareholders' advisory firm Boudicca Proxy to poll 300 institutional investors, around half of the Dutch firm’s total shareholder base, accounting for about 24.6% of AkzoNobel's outstanding share capital. All want AkzoNobel to open talks, Elliott said in a statement.

The US$26.4 billion takeover offer by PPG http://plasticsandrubberasia.com/mar2017/company6.html and the second proposal of 20 March from PPG for all of the issued and outstanding ordinary shares in the capital of AkzoNobel “fails to reflect the current and future value of AkzoNobel, it also neglects to address the significant uncertainties and risks for shareholders and other stakeholders,” the firm said in a statement.

The company says it has thoroughly reviewed the second proposal taking into consideration the interests of AkzoNobel's shareholders, customers, employees and other stakeholders and says the revised proposal represents a value of EUR88.72 (adjusted for final dividend) consisting of EUR56.22 (adjusted for final dividend) in cash and 0.331 PPG shares, as at 20 March 2017, per AkzoNobel share.

The proposal, it says, does not address the concerns expressed by the Boards in their initial rejection of 9 March 2017. The revised proposal, it adds will result in significant job cuts.

The company has called an investor summit as it looks to quell a shareholder revolt over its refusal to enter takeover talks with American rival PPG.

The Dutch company’s Chief Executive, Ton Büchner, has resisted calls to engage with PPG despite pressure from a series of major shareholders, including threats to have him removed, adding that AkzoNobel was “best placed” to deliver growth on its own, as the company brought forward its investor update next month.

Büchner said, "This proposal significantly fails to recognise the value of AkzoNobel. Our Boards do not believe it is in the best interest of AkzoNobel's stakeholders, including our shareholders, customers and employees. That is why we have rejected it unanimously.”

He added, "We are convinced that AkzoNobel is best placed to unlock the value within our company ourselves. We are executing our plan, including the creation of two focused businesses and new cost structure, and believe this gives us a strong platform for continued profitability and long term value creation for all our stakeholders with substantially less execution risks."


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