This is getting a bit awkward.
Relations between Dulux owner AkzoNobel and investor Elliott Advisors are becoming increasingly strained over a takeover proposition by US-based PPG Industries.
Dutch firm Akzo said today it had received a request from a group of shareholders, led by Elliott, to hold an extraordinary general meeting (EGM) to dismiss its chairman Antony Burgmans.
It has also reported Elliott to the regulators, saying it became aware yesterday of Elliott's intention to "privately share potentially price sensitive information with PPG" about its decision to request an EGM. It has called on Elliott and PPG to clarify their relationship.
The firm said in a statement: "The supervisory board strongly supports Mr Burgmans in his role as chairman. His unique experience of international business and global transactions is crucial to the company."
The view of the board is that the removal of Burgmans would be "irresponsible, disproportionate, damaging and not in the best interest of the company, its shareholders and other stakeholders", and as a result, the proposal will be rejected.
Elliott has been trying to ramp up the pressure on Akzo to negotiate a potential sale to US manufacturer PPG Industries, after Akzo rejected an improved €22.4bn (£19bn) cash and stock offer last month.
In response to Akzo reporting it to the regulators, Elliott said:
“PPG has met and communicated with Akzo Nobel’s top 20 shareholders; as one of the top 20 shareholders of Akzo Nobel, Elliott has therefore, as a matter of course, met and communicated with PPG.
"A substantial portion of Akzo Nobel’s shareholders have requested the company to convene an EGM to vote on the removal of the Chairman of the Supervisory Board. We now call on Akzo Nobel, to respect the will of the shareholders and convene the EGM at the shortest notice possible."
Akzo has now rejected two takeover approaches from PPG. When the second, €88.72-per-share offer, was rejected, Elliott blasted the firm for its “failure to engage” with PPG.
The hedge fund believed the offer was not sufficient but didn't understand Akzo’s decision not to talk to PPG at all.
AkzoNobel has said that it is not engaging because it feels the offers undervalue the company, and that a deal would raise complex antitrust concerns. There has also been vocal political opposition in the Netherlands to the deal.
In accordance with Dutch company law, the board will consider the proposal to hold an EGM and respond within the statutory 14 days.