Vultures lose court battle in £22bn Dulux bid

THE American giant demanding takeover talks with the owners of Dulux could be poised to make a hostile bid after suffering a critical court defeat last night.

PPG will hold a board meeting today to decide how to proceed with its swoop on Dutch chemicals firm Akzo Nobel following weeks of stalemate since its third raised offer, of £22bn, was also rejected.

Akzo claims the bids undervalue the business and would threaten 4,000 British jobs at Dulux’s UK sites.

Yesterday a Dutch court dealt a major blow to the Pittsburgh-based firm and its backers at US vulture hedge fund Elliott when it ruled that Akzo had been within its rights to reject takeover talks. It also dismissed calls by Elliott for the chairman of Akzo, Antony Burgmans, to be ousted.

However, the judge told Akzo to better explain its position on the offer to shareholders.

An Akzo spokesman said the company was pleased the Dutch court had decided its boards have acted in accordance with the highest standards of corporate governance. ‘The ruling dismisses all the requests of Elliott,’ he added.

Elliott, which has 3pc of shares in Akzo and is known for its aggressive campaigns to influence boardrooms, took the fight to the Dutch courts after declaring a ‘crisis of confidence’ at the firm.

Last night Elliott said it was ‘surprised and disappointed’ by the ruling. PPG boss Michael McGarry said: ‘The era of elitism and the board knows best is over. The shareholder needs to be heard.’

Following the court defeat, PPG has to decide whether to walk away or make a hostile offer. It is thought that shareholders with around 25pc of Akzo stock already support a takeover.

Under Dutch takeover rules it must submit formal bidding papers along with evidence of financing by Thursday, otherwise it faces a six-month cooling-off period.