Akzo Nobel rejects third takeover proposal from PPG
By Toby Sterling
AMSTERDAM (Reuters) - Dutch paint maker Akzo Nobel (AKZO.AS: Quote) on Monday rejected a third takeover proposal from PPG Industries (PPG.N: Quote), leaving its larger U.S. rival to decide whether to make a formal bid without the support of Akzo's board, or throw in the towel.
PPG's third offer values Akzo at 26.3 billion euros ($28.8 billion) including debt but the Dutch firm, which makes Dulux paint, said it was too low, faced antitrust risks and failed to address concerns such as "cultural differences".
PPG has significant support among Akzo shareholders. But opposition from its boards, Dutch politicians and many of its Dutch staff present difficulties PPG will have to weigh before a June 1 deadline to bid or walk away for at least six months.
The deal would combine the world's two biggest makers of paints and coatings and PPG reckons it can achieve savings of $750 million thanks to factors such as economies of scale on production and lowering input costs.
A group of Akzo Nobel shareholders led by hedge fund Elliott Advisors has been pushing for it to discuss a merger with PPG but Akzo said on Monday it would not engage in discussions with the U.S. firm about the current offer.
"The PPG proposal undervalues AkzoNobel, contains significant risks and uncertainties, makes no substantive commitments to stakeholders and demonstrates a lack of cultural understanding," Akzo Nobel CEO Ton Buechner said in a statement.
Reuters reported on Tuesday that Akzo was poised to reject PPG's latest offer, made on April 24.
Buechner told reporters he and Akzo Chairman Antony Burgmans met PPG Chief Executive Michael McGarry on Saturday but would not give details of what was discussed, saying only that it was "cordial and respectful". Continued...