Activist investor Elliott Advisors has turned the heat up on AkzoNobel over its “failure to engage” with US rival PPG Industries.
AkzoNobel, which owns Dulux paint, this morning said it had rejected a second takeover approach from PPG worth around €22.4bn (£19.4bn).
The Dutch company’s shares fell three per cent after the announcement, and Elliott, which owns more than three per cent of AkzoNobel shares, said it was concerned by its approach to the offers.
Elliott said the offer was “inadequate” but said it “views such level of bid price to be a credible basis for engagement”.
The investor has also called for a “meaningful shareholder consultation” on the approach.
“Elliott urges AkzoNobel to engage with PPG immediately to determine whether PPG is prepared to bid at a level that provides adequate consideration to AkzoNobel shareholders and whether PPG can adequately address all relevant stakeholder considerations,” the investor said.
“At this juncture, Elliott is disappointed by AkzoNobel’s conduct in relation to PPG’s bids, and concerned that AkzoNobel appears to be ignoring the will of shareholders which seems to strongly support engagement with PPG.”
In rejecting the latest PPG approach, AkzoNobel said: “The proposal not only 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 revised €88.72-per-share offer by PPG values AkzoNobel at around €22.4bn (£19.4bn). The original €83-per-share bid, rejected earlier this month, valued the company at €21bn.
Rejecting the original bid, the company said it would instead seek to “unlock value” by spinning off its chemicals business
Chief executive Ton Buchner said today: “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.”
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.