PPG again urges Akzo to negotiate deal

Dutch company maintains that offer is too low

PPG once again urged rival coatings maker AkzoNobel to come to the table for merger talks and said it will submit a public offer for the Dutch coatings and chemicals giant by June 1.

Amsterdam-based Akzo, which has twice rebuffed bids by PPG and has declined to meet with the company, responded to PPG’s latest overture Wednesday with a statement saying PPG’s proposals “are unacceptable.”

“Let’s not get caught up in other issues around the proposal such as engagement,” said an Akzo spokesperson.

PPG’s latest offer for Akzo was 90 euros a share, or a total $26.3 billion.

Akzo’s shares closed Wednesday at 79.10 euros, up 1.14 euros. Shares in PPG rose 23 cents to $105.

While Akzo continues to maintain that PPG’s offer undervalues the Dutch company and would result in intense antitrust scrutiny and employee layoffs, several of Akzo’s major shareholders — including hedge fund Elliott Management, which holds a 3 percent stake — have pressured the company to negotiate a deal with PPG.

Although it can’t get a meeting with Akzo’s executives, Downtown-based PPG has been engaging with shareholders on its own.

Following recent visits with large Akzo shareholders in the U.S. and Europe, PPG said it found strong support for its bid to buy the maker of Dulux and other paint brands.

“How are they going to look their stakeholders in the eyes on the best path forward when they have not sat down with us?” said Michael McGarry, PPG’s chairman and chief executive.

“The resounding feedback we have received in the Netherlands, the U.K. and the U.S. further validates the merits” of a merger, he said.

The possibility of a hostile bid for Akzo is still an option, he said.

In a statement Wednesday, PPG “reiterated its invitation” for Akzo to enter discussions and said it would address Akzo’s concerns including antitrust matters and the deal’s effect on jobs.

In earlier statements about why it doesn’t want to be acquired, Akzo said it will boost value for its shareholders by spinning off its chemicals segment, which accounts for about one-third of its $15 billion in annual revenues. Mr. McGarry said Wednesday that Akzo’s proposal to split off its specialty chemicals “leads to greater uncertainty for all of their stakeholders.”

PPG ’s offer includes all of Akzo including its specialty chemicals, he said, and several parties have expressed interest in parts of Akzo that might be divested.

PPG said it intends to make a public offer for Akzo and submit a draft offer to the Netherlands Authority for Financial Markets by June 1.

Akzo is scheduled to release details of its plan to separate its chemicals unit on April 19.