AkzoNobel rejects another takeover bid from PPG Industries
Dulux owner AkzoNobel has rejected a third takeover bid, worth 26.9 billion euro (£22.7 billion), from US chemicals giant PPG Industries.
AkzoNobel said its executives met with PPG over the weekend, but the company has nevertheless concluded it favours its own strategy to accelerate growth and value rather than a takeover.
Ton Buchner, AkzoNobel chief executive, 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."
AkzoNobel's own strategy includes returning 1.6 billion euro (£1.3 billion) to shareholders in 2017, and creating two separate firms by hiving off its Specialty Chemicals business for its paints and coatings arm.
The company is under pressure from shareholders to embrace the deal with PPG, with activist investor Elliott Advisors calling for an extraordinary general meeting (EGM) where investors can vote to remove AkzoNobel chairman Antony Burgmans.
Known for its strong-arm tactics, Elliott, which holds a stake worth more than 3%, said it would attempt to oust AkzoNobel's managers if the company refused to commence talks with PPG.
PPG now has until June 1 to decide if it wants to table a formal bid without the support of Akzo's board, effectively turning the takeover attempt hostile.
PPG said in a statement: " PPG is disappointed that AkzoNobel has once again refused to enter into a negotiation regarding a combination of the two companies, ignoring the best interests of its stakeholders including long-term shareholders who overwhelmingly support engagement.
"PPG continues to believe its proposal is vastly superior in shareholder value creation and provides more certainty to employees and pensioners than AkzoNobel's recently announced new standalone plan.
"PPG will review the full details of AkzoNobel's response issued today."