Shareholders stir-up paint proposal

PPG’s proposed takeover of AkzoNobel continues to come under the spotlight with news of shareholders urging the Dutch company to talk with its American rivals.

PPG offered a revised €22.7m bid earlier this week, which AkzoNobel rejected. It said the ‘unsolicited proposal’ didn’t warrant engagement and that there was a ‘significant cultural gap’ between the two organisations.

CEO Ton Buechner said it wasn’t ‘solely about price,’ and that AkzoNobel would be better served by separating its chemicals division from the main company.

But it’s now emerged certain shareholders are understood to be in favour of accepting the new, higher offer.

The increased bid, from the initial offer of €21bn, values shares at €90. Speaking to Reuters, a top-20 shareholder said, ‘At this price we would believe it is up to management to convince us not to sell.’

However, speaking to Bloomberg, Bernstein analyst Jeremy Redenius said, ‘We worry PPG has undershot with this bid. We think PPG knew they needed a second bid in the €90 range to get engagement from Akzo and elected to not be aggressive enough, which calls into question their desire to return with a yet higher offer.’

PPG chairman and CEO Michael McGarry, who is travelling to the Netherlands to raise support, said, ‘We believe the revised proposal presents an opportunity for AkzoNobel’s shareholders to realise extraordinary value, by any measure, for their shares in AkzoNobel.’

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