AkzoNobel rejects activist investor bid for EGM to oust chairman
Dulux paint owner AkzoNobel has rejected calls for an extraordinary general meeting (EGM) aimed at ousting its chairman and helping kick-start takeover talks with US chemicals giant PPG.
Shareholders led by activist investor Elliot Advisors lodged a request for an EGM earlier this month, with plans for just one agenda item that would dismiss Antony Burgmans as chairman of AkzoNobel's supervisory board.
It followed warnings from Elliot - which is known for its strong-arm tactics - that it would attempt to oust management if AkzoNobel refused to hold talks with PPG, a US company that has upped its takeover offer by 8%, valuing the deal at 26.9 billion euro (£22.8 billion).
Management had already rejected the request for the agenda item that would have forced Mr Burgmans to resign, but formally dismissed the call for an EGM on Tuesday after taking "detailed legal advice".
Dutch law allows shareholders representing at least 10% of the company's shares to call for a general meeting, but AkzoNobel noted that it is also conditional on "meeting standards of reasonableness and fairness and a 'legitimate interest' test".
The firm said in a statement: "The supervisory board has concluded that the request from Elliott Advisors to dismiss the c hairman does not meet the standards required under Dutch law.
"The request is irresponsible, disproportionate, damaging and not in the best interests of the company. Given the sole agenda item, there is no legal basis for calling an EGM."
PPG earlier this week upped the ante in its takeover pursuit by bolstering its cash and share bid by 8% to 96.75 euro per share.
The US firm's chief executive Michael McGarry said it was "extending this one last invitation" for AkzoNobel to back its takeover approach, and said it would not shift any production from Europe to the US as part of the improved offer.
It also vowed to keep the headquarters for the marine and protective coatings business, and the decorative coatings and speciality materials arm, in the UK and the Netherlands respectively.
AkzoNobel, which employs 3,000 staff across the UK, has previously warned that any deal with PPG would trigger ''significant job cuts'' and create uncertainty for thousands of workers across the globe.
In response to the fresh approach, AkzoNobel said it would "carefully review and consider this proposal".
AkzoNobel deputy chairman Byron Grote said: "Following a thorough review and careful considering of this request the supervisory board reiterates its unanimous support for Mr Burgmans in his role as chairman.
"His unique experience in international business and global transactions is crucial to the company. He has played an important role in overseeing and supporting management in the transformation of the company in recent years, contributing to its significantly improved performance.
"It is essential that the steady and experienced hand of the supervisory board and its chairman remains focused on the task of steering the company at this crucial time."