Akzo Nobel aims to soothe shareholders over PPG rejection
By Toby Sterling
AMSTERDAM (Reuters) - Dutch paints maker Akzo Nobel (AKZO.AS: Quote) said it will raise its financial targets and detail plans for its chemicals division next month, as it seeks to win over shareholders and avoid a takeover by U.S. rival PPG Industries (PPG.N: Quote).
Akzo said it will announce the plans on April 19 and also brought forward the release of its first quarter earnings to that date, giving investors a week to digest its case for remaining independent before the company's annual meeting on April 25.
Akzo's biggest shareholder, other investors and analysts have called for the company's boards to engage in talks with PPG after they rejected the U.S. company's 24.2 billion euro ($26 bln) takeover proposal on March 20.
"Our new strategy will further unlock the value within the company, including the creation of two focused businesses," Akzo CEO Ton Buechner said in a statement. It will "deliver improved profitability and additional long-term value creation for shareholders, employees (and) customers," he said.
The company said it would unveil plans for selling or floating its chemicals division, which accounts for about a third of company sales and profits and has been estimated to have a standalone value of around 8 billion euros.
Under Dutch law, Buechner is required to consider other interests alongside shareholders' when making major corporate decisions. Akzo's labor unions have said they support management and oppose a PPG takeover, fearing job cuts.
Some analysts were skeptical that the April 19 presentation would change many minds.
KBC Securities' analyst Wim Hoste said Akzo's current financial targets were already conservative and could easily be upgraded. But the sale of the company's chemical division by itself would not actually improve prospects. Continued...