Akzo Nobel wins court case against dissident shareholders
By Toby Sterling and Bart Meijer
AMSTERDAM (Reuters) - A Dutch court on Monday rejected a request by Akzo Nobel (AKZO.AS: Quote) investors for it to take immediate action against the company over its rejection of a takeover bid by U.S. rival PPG Industries (PPG.N: Quote), handing the Dutch company a victory in its efforts to repel the U.S. firm's 25 billion euro ($28 billion) proposed offer.
The decision ratchets up the pressure on PPG to decide whether to file formal bidding papers for Akzo with Dutch regulators by a June 1 deadline - or walk away for at least six months.
PPG said in a statement after the ruling it was still weighing whether to bid or not.
Presiding Judge Gijs Makkink said Akzo's board had been within its rights to reject entering into talks with PPG. However, he noted the management faced dissent from a large group of shareholders which wanted it to engage in talks with PPG. A group representing around 18 percent of its equity had spoken out in support of the suit, launched by hedge fund Elliott Advisors.
"This is a problem that cannot be ignored by Akzo Nobel," Makkink said, though he left it up to the company to decide what steps it should take to mend the rift.
Elliott Advisors had asked the court to order an extraordinary shareholders meeting to consider a motion to dismiss Chairman Antony Burgmans over the company's decision to reject a proposed takeover offer from PPG worth 25.3 billion euros ($28.3 billion).
The judge rejected that, saying it amounted to an attempt to force the board of directors to change their strategic direction, which was not a right that shareholders have under Dutch law.
Elliott said in a statement it was "surprised and disappointed" by the ruling. Continued...