Akzo to explain decision to reject PPG overtures

Dutch paints company AkzoNobel, which spurned three offers to be acquired by PPG, will hold a special shareholders meeting in September to explain its strategy in rebuffing the Pittsburgh-based coatings company.

Also Tuesday, Akzo said its chairman, Antony Burgmans, who strongly resisted PPG’s efforts, will step down in April when his current term expires. His announcement comes days after Ton Buchner, the former Akzo chief executive who was also involved with the decision to turn down PPG, said he was stepping down immediately because of health reasons.

PPG, which under Dutch financial law could launch another bid for Akzo in December after a

cooling-off period, said it had no comment Tuesday on the departure of Mr. Burgmans. In a conference call with analysts last week, PPG chairman Michael McGarry said the company had put Akzo “in the rear-view mirror.” Akzo’s special meeting, scheduled for Sept. 8 in Amsterdam, is part of a series of actions the company announced Tuesday as a plan to improve its relations with shareholders. Akzo remains under pressure from its largest shareholder, activist hedge fund Elliott Advisors, because its top management, led by Mr. Burgmans, declined to negotiate with PPG. In its last offer, PPG proposed buying the Dutch company for $29 billion. Elliott has filed legal actions against Akzo, saying its top management didn’t act in the best interest of shareholders. It wants Mr. Burgmans ousted before next year and it also wants input on the special meeting agenda. In addition to holding the special shareholder meeting, during which it also will hold a vote on its new chief executive, Thierry Vanlancker, Akzo said it has created a supervisor board committee for shareholder relations that will be advised by JP Morgan Cazenove. It also said it plans to meet more frequently with investors and analysts. “We have actively reached out to our shareholders to create a plan to strengthen our relationship,” Mr. Burgmans said in a statement. Akzo, which said it plans to spin off its specialty chemicals segment from its paints business to raise shareholder value, reported second-quarter income Tuesday that missed analysts’ forecasts. Earnings before interest and taxes fell 6 percent to 461 million euros ($537 million). Analysts expected adjusted earnings of 500 million euros.