One of AkzoNobel’s largest shareholders has today publicly thrown its weight behind Elliott Advisors’ call for an extraordinary general meeting (EGM) to vote on the future of the Dutch firm’s chairman.
Templeton Global Equity Group, part of Franklin Templeton, which owns a 3.9 per cent stake in the Dulux maker, said that while it may not necessarily vote to oust chairman Antony Burgmans, “we do expect AkzoNobel to respect shareholders’ rights to request that such a discussion takes place”.
Therefore, we are disappointed in the first response by Akzo Nobel to this request, which indicates an intention to refuse to honour the shareholders’ rights. We encourage the board to respond respectfully to the request and to arrange the meeting in the earliest possible timeframe.
It has been a tough couple of weeks for AkzoNobel. After fending off two uninvited offers from US rival PPG Industries, the firm has come under intense pressure from Elliott and other investors. They have condemned the board of AkzoNobel for not engaging in talks with PPG.
Templeton Global Equity Group said today:
[N]o offer in relation to the company’s shares should be dismissed without full and careful assessment of the offer’s potential and due consideration of the will of the shareholders. In this regard, we have been disappointed by the board’s unwillingness to have any dialogue with PPG and its failure to respond satisfactorily to our concerns.
The situation escalated for Akzo yesterday. The company revealed early in the morning it had received a request to hold an EGM to vote on Burgmans’ future. Akzo rejected the request, saying the removal of Burgmans would be “irresponsible, disproportionate, damaging and not in the best interest of the company, its shareholders and other stakeholders”.
At the same time, Akzo revealed it had become aware that Elliott “intended to privately share potentially price sensitive information with PPG about its decision to request an EGM”. This reportedly emerged after an Akzo employee was CCed into an internal Elliott email. Akzo said it had shared this information with the Dutch Authority for the Financial Markets and called on Elliott to “clarify their relationship and the history of [its] communications” with PPG.
Elliott responded by saying that it had met with PPG, as had other top 20 shareholders, but was “aware of its various regulatory obligations, including obligations related to handling price sensitive, or potentially price sensitive, information”.
On the EGM, it later added:
Elliott views Akzo Nobel’s position rejecting the agenda item as inexplicable. Shareholders have a legal right under Dutch law to put a proposal to dismiss Mr Burgmans onto the EGM agenda. To the extent that AkzoNobel refuses to put this item onto the EGM agenda, Elliott intends to use its recourse to the Dutch courts, including the enterprise chamber.