Activist investor Elliott isn't giving up easily. And today its public spat with the management of Dutch paint giant AkzoNobel ratcheted up another notch.
Elliott commissioned a study that concluded around 6,400 people will lose their jobs if the AkzoNobel continues with its current plans.
US painting giant PPG has had several takeover approaches turned down by AkzoNobel, which has refused to engage with PPG to seriously entertain the offer.
Elliott has demanded management to meet with PPG to discuss the deal. Such a meeting has been supported by a number of AkzoNobel's other institutional investors.
Instead, AkzoNobel unveiled a corporate shake-up last month to separate its operations to "deliver superior shareholder value". The changes, which included spinning off its speciality chemicals business, would facilitate considerable cost savings and lead to 3.4 per cent of margin expansion.
Elliott responded by engaging consultants from ChemQuest to calculate the likely level of redundancies required to achieve the additional profit margins.
In a statement, Elliott said: "Approximately 6,400 redundancies may be required to achieve Akzo Nobel’s margin guidance. The analysis also indicates that it is likely that the level of employee redundancies resulting from a potential transaction between PPG and Akzo Nobel would be less than a quarter of this level."
Elliott has been supported by Causeway Capital and Columbia Threadneedle over the course of its public disagreement with AkzoNobel. It said a tie-up with PPG would lead to a "larger and stronger company better positioned to grow, gain market share, innovate and compete in the future".
The fund added AkzoNobel's plan "assumes significantly greater execution risk and entails a considerably higher degree of uncertainty for all AkzoNobel stakeholders".
A spokesperson for AkzoNobel said: "AkzoNobel's strategy is about growth. We are creating two world class businesses which we expect to grow faster than the markets. Our efficiencies will be created mainly through continuous improvement to systems and processes.
"The research published today in no way reflects the reality of our plans."