Elliott, the activist hedge fund which owns a three per cent stake in Dulux owner AkzoNobel, is set to take the conglomerate to court today over its refusal to hold an extraordinary general meeting (EGM).
The court case is the latest move in an attempted takeover saga spanning several months.
Elliott hopes to use the EGM to oust Antony Burgmans, chairman of AkzoNobel’s supervisory board, who has refused to entertain bids for the company from American rival PPG.
Burgmans is keen to remain at the helm of the business and has said that its future plans, which include spinning out the specialty chemicals branch, will create “superior shareholder value”.
Elliott filed the petition with the Dutch Enterprise Chamber earlier this month, after AkzoNobel rejected a third proposal from PPG of €96.75 per share.
Coming in at a premium to the current €75.33 apiece share price, Elliott denounced the refusal to engage as a “flagrant breach” of the board’s fiduciary duties and “an arrogant dismissal of recognised principles of proper corporate governance”.
However, in contrast to countries such as the UK and the US, where corporate governance is deemed to be shareholder friendly, Dutch law is widely perceived to be more stakeholder oriented.
In a jurisdiction which may place added weight on job stability, for instance, AkzoNobel has argued that its own strategy “does not contain the risks and uncertainties inherent in PPG’s proposal”.
A ruling from the court is not expected within the day, but may well be given over the next week.
Although it is unclear the extent to which other shareholders agree with Elliott, some have come out in support of the hedge fund.
Yet since the rejection of PPG’s third bid, AkzoNobel has held an annual general meeting in which it reported “widespread support” for the business.