Dulux takeover: Now it’s all out war
Americans prepare a hostile bid and will rip up promises on jobs
AMERICAN vultures are set to stage a hostile takeover of Dulux and abandon promises to save jobs after a £22.5bn bid was publicly rebuffed.
At a fiery annual general meeting in Amsterdam yesterday, Dulux owners Akzo Nobel fought off attempts by major shareholders to begin talks with American rival PPG. But its bold battle to fend off attempts to oust chairman Antony Burgmans and hold an extraordinary general meeting could end in court.
Activist investors claim Akzo Nobel does not have the right to refuse to hold an EGM, and they prepared to put their case to Dutch judges.
Meanwhile, PPG said it would launch a hostile bid for Akzo, which employs around 3,300 at its Dulux factories in Slough and the East Midlands, if bosses continued to reject its advances. It said it would ditch promises, which included protecting UK jobs.
Yesterday, to applause from employees and small shareholders, boss Tom Buchner, said that the business could be strong as a standalone company and would stand by its employees, many of whom protested the takeover bid outside the meeting.
But while his pleas were backed by a majority of the roughly 300 Akzo shareholders gathered at the packed assembly room, many of whom were former workers and life-long investors, the big-name stakeholders continued to push for a deal. In tense scenes, the firm rejected shareholder requests to call an extraordinary general meeting to oust Burgmans.
Shareholders, led by rebel US vulture fund Elliott Advisors, had called for Burgmans to be removed after the firm rebuffed two £18.1bn and £19.3bn bids from PPG last month.
It claimed that under Dutch law shareholders representing more than 10pc of the stake had a right to call the meeting. But Akzo dismissed the vulture fund saying Dutch law does not give shareholders a right to call EGMs, only to request them. Akzo blasted Elliott’s request as ‘irresponsible, disproportionate, damaging and not in the best interests of the company’. Elliott, which won the support of five other shareholders to call the EGM, slammed the paint maker’s response during questioning yesterday, asking: ‘What’s so irresponsible and what’s so damaging about allowing shareholders to have a vote?’
Other key shareholders also dished out criticism.
Daniel Summerfield, investor at USS Investment Management, said he was ‘disappointed and surprised’ by the firm’s approach to the request for an EGM.
VEB, a Dutch shareholder group, also questioned why Akzo had so far failed to properly engage with PPG.
But one shareholder and employee said: ‘Elliot has contributed nothing to our company or Akzo Nobel. They behave not as a responsible shareholder behaves but like a trader whose sole purpose is to earn as much money in a few months.’