AkzoNobel rejects third €26.9bn takeover proposal from PPG

 
Courtney Goldsmith
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The paint maker has rejected another takeover proposal (Source: Getty)

Dutch paint giant AkzoNobel has rejected a third takeover offer from US firm PPG which valued the company at €26.9bn (£22.8bn).

The decision follows a meeting between chief executive of Akzo, Ton Buchner, and Michael McGarry, chairman and chief executive of PPG, on 6 May.

"AkzoNobel has concluded its own strategy, presented on April 19, 2017, offers a superior route to growth and long-term value creation and is in the best interests of shareholders and all other stakeholders," the firm said in a statement.

Akzo, the maker of Dulux paint, said it will now focus on its own strategy to accelerate growth and value creation, which includes selling or floating its chemicals business, which makes up about a third of sales and profits, within 12 months.

It said PPG's offer undervalues the company, faces antitrust risks and does not address other shareholder concerns, like "cultural differences".

Akzo's shares fell 2.52 per cent to €77.40 in afternoon trading.

US painting giant PPG has had several takeover approaches turned down by AkzoNobel.

Activist investor Elliott Advisors, which has demanded management meet with PPG to discuss the deal, last week commissioned a study that concluded around 6,400 people will lose their jobs if AkzoNobel continues with its current plans.

Buchner today said: "The PPG proposal undervalues AkzoNobel, contains significant risks and uncertainties, makes no substantive commitments to stakeholders and demonstrates a lack of cultural understanding.

"By contrast, AkzoNobel has outlined a compelling strategy to accelerate growth and value creation which we believe will deliver significant long-term value for our shareholders and all other stakeholders. We will deliver this within a clear timeline, without the substantial level of risks and uncertainties attached to the alternative proposal."

PPG said it was "disappointed" Akzo refused to negotiate at the 6 May meeting and claimed the Dutch company was ignoring the best interests of its stakeholders.

"The failure of the AkzoNobel boards to engage with PPG to fully evaluate and discuss PPG’s proposal reflects a continued lack of proper governance, and is another attempt to avoid a true comparison on stakeholder impacts of PPG’s proposal versus AkzoNobel’s standalone plan."

PPG must now decide whether it will make a formal bid ahead of a 1 June deadline under Dutch securities laws without the support of Akzo's boards.

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