AkzoNobel stands by its chairman
Rejects hedge fund’s request to oust him
Pittsburgh Post-Gazette
AkzoNobel, the Dutch paints maker that PPG wants to buy for $26 billion, said Wednesday it stands by its chairman, Antony Burgmans, and will reject a request by shareholder Elliott Management to oust him.
Akzo further said it believes Elliott, a U.S.-based hedge fund, may be working with Pittsburgh coatings giant PPG on a plan to take control of Akzo.
PPG denied it has such an arrangement with Elliott. The hedge fund owns a 3 percent stake in Akzo and has urged Akzo to meet with Downtown-based PPG and discuss a combination of the two coatings companies.
Akzo said it became aware on Tuesday that Elliott “intended to privately share potentially price sensitive information with PPG about its decision to request an extraordinary general meeting.”
Akzo said it shared its findings with Dutch financial regulators and said it was calling “on Elliott Advisors and PPG to clarify their relationship and the history of the communications between the two companies.”
While PPG acknowledged it met with Elliott as well as other Akzo shareholders in the weeks since Akzo rebuffed two offers to buy it, “There has not been any, and there are currently no agreements or arrangements, in whatever form, between PPG and Elliott Advisors,” PPG said in a statement.
“It would be preferable from PPG’s perspective if AkzoNobel would speak with us rather than about us,” PPG said. “We continue to invite AkzoNobel to meet with us and strongly believe it’s in the best interest of their stakeholders.”
According to Akzo, Elliott and other shareholders have requested a meeting to dismiss Mr. Burgmans.
The company said Dutch law requires it to consider the proposal for a meeting but that it will reject any agenda item that proposes the removal of the chairman.
“The removal of Mr. Burgmans would be irresponsible, disproportionate, damaging and not in the best interest of the company, its shareholders and other stakeholders,” Akzo said.
Elliott said it was prepared to take the matter to Dutch courts if Akzo refuses to allow shareholders to vote on removing Mr. Burgmans.
In rejecting two offers from PPG, Akzo has said PPG’s bids undervalue the company, and would result in job losses and intense antitrust issues because of overlaps in the two companies’ operations. PPG’s most recent offer for Akzo was 90 euros per share which includes a dividend.
Akzo shares Wednesday closed at 78.54 euros, down 56 cents. Shares in PPG fell $1 to $105.06.
The Dutch company plans to release a new strategy on April 19 for spinning off its chemicals business from its coatings operations to increase shareholder value on its own instead of being acquired.
Investment firm Bernstein said in a research note that PPG might submit another bid for Akzo shortly after the Dutch company outlines its plan to separate its businesses.