AMSTERDAM (Reuters) - A rebel shareholder in Akzo Nobel (AKZO.AS) threatened the Dutch paint maker with legal action on Wednesday after the company said it would reject any proposal for a vote on dismissing its chairman at a shareholders’ meeting.
Fund manager Elliott Advisors is one of a group of shareholders who want to oust Chairman Antony Burgmans, an opponent of U.S. rival PPG Industries’ (PPG.N) attempt to take over the company.
Elliott, one of Akzo’s largest shareholders, had earlier said it, together with other investors, had the 10 percent support needed under Dutch law to call an extraordinary shareholders’ meeting to vote on Burgmans’ dismissal.
“Shareholders have a legal right under Dutch law to put a proposal to dismiss Mr. Burgmans onto the EGM agenda,” Elliott said in a statement in response to what it called Akzo’s “inexplicable” refusal. It said it was prepared to take the matter to the Dutch courts.
But a person familiar with Akzo’s thinking, who did not wish to be named, disputed that shareholders have such a legal right.
Elliott and other investors have pushed Akzo to hold talks with U.S. coatings manufacturer PPG after the Dutch company rejected a sweetened 22.4 billion euro ($24 billion) cash-and-stock proposal from PPG last month.
Akzo has declined, instead touting an alternative plan to spin off its chemicals arm, representing about a third of its operations.
“We fail to see how Akzo Nobel could have a meaningful discussion with shareholders about its plans for a potential separation of the specialty chemicals business while the alternative of a transaction with PPG is being effectively disregarded from the outset,” Elliott said in a letter sent to the company’s management on Wednesday.
“We believe the boards are wilfully ignoring the interests of stakeholders in this respect and that they are acting in a self-entrenching and obstructive manner.”
“The view of the supervisory board is that the removal of Mr. Burgmans would be irresponsible, disproportionate, damaging and not in the best interest of the company, its shareholders and other stakeholders,” the company said in a statement earlier on Wednesday.
An EGM takes around eight weeks to prepare. Akzo plans a meeting with shareholders on April 19 in London to explain its plans to spin off its chemicals business rather than agreeing to PPG’s offer, worth 90.59 euros at current share prices.
Akzo shares closed 0.7 percent lower at 78.54 euros on Wednesday, the gap to the offer price signaling many investors are skeptical PPG’s bid will ultimately succeed.
Most investors and analysts doubt Akzo’s plan can rival in financial terms what PPG is willing to pay.
However Akzo CEO Ton Buechner has argued his plan is better for “all stakeholders” including employees, customers, and the environment.
Pittsburgh-based PPG says that is not true and Akzo should enter talks to better understand the benefits that would flow to those stakeholders from its own proposal.
Reporting by Alan Charlish in Gdynia and Toby Sterling and Thomas Escritt in Amsterdam; Editing by Keith Weir and Susan Fenton