AkzoNobel's largest shareholder urges talks with PPG after takeover snubbed
AkzoNobel's largest shareholder has urged the company to "engage in discussions" with PPG Industries after it snubbed a second takeover offer worth 22.4 billion euro (£19.5 billion).
Causeway Capital said the current proposal was "inadequate", but pushed for the Dulux paint maker to begin talks with PPG to "maximise shareholder value" and "address the interests of all stakeholders".
The investment firm, which owns a 6.8% stake, joins a host of investors demanding the two companies meet.
Writing to AkzoNobel's board, Sarah Ketterer, Causeway Capital's chief executive, said: "As long-term shareholders, we believe combining AkzoNobel and PPG would create a stronger company, and lead to improved prospects for both shareholders and employees."
Activist investor Elliott Advisors ratcheted up the pressure on Wednesday, saying it will attempt to oust AkzoNobel's managers if the company fails to start talks with PPG.
Elliott, which holds more than a 3% stake, said ''most shareholders'' wanted the company to engage with PPG and threatened to call an extraordinary general meeting (EGM) where investors could vote to remove managers if more than half the issued capital is represented.
Top 20 shareholders Columbia Threadneedle and Henderson are also said to be pressing for talks to begin.
The Dutch manufacturing giant rejected a second non-binding proposal worth 88.72 euro (£76.75) per share in both cash and shares on March 20.
It said the offer failed to ''reflect the current and future value'' of the firm and did not ''address significant uncertainties and risks'' for shareholders and stakeholders.
AkzoNobel, which employs 3,000 staff across the UK, said a tie-up would trigger ''significant job cuts'' and create uncertainty for thousands of staff across the globe.
PPG, a Pittsburgh-based chemicals manufacturer, said the new offer would deliver annual cost savings of 750 million US dollars (£601 million).
It comes just two weeks after the Dutch firm rebuffed PPG's initial offer worth 20.9 billion euro (£18.2 billion).
AkzoNobel announced plans last month to build a 12.6 million euro (£10.7 million) innovation hub near Gateshead, safeguarding 270 jobs.
The firm is also looking to launch a 110 million euro (£93.7 million) Dulux paint factory in Ashington, Northumberland.
The Dutch firm employs 46,000 people in 80 countries and recorded total revenues of 14.2 billion euro (£12.2 billion) last year.
Its British headquarters and global decorative paints research and development centre is based in Slough, Berkshire.