Dulux paint maker rejects second takeover offer

The Dutch maker of Dulux paint has rejected a second takeover offer from a US rival.

Paints and coatings maker AkzoNobel turned down PPG Industries, saying an improved 22.4bn euro (£19.3bn) offer was too low and risky.

Dutch politicians had publicly opposed PPG’s first proposal, saying it was not in the interests of the country.

Akzo shares fell 2.5% to 74.71 euros in Amsterdam following the rejection.

In a statement, Akzo said the new PPG proposal made on 20 March was worth 88.72 euros a share.

The previous rejected offer made on 9 March was worth 83 euros a share, valuing the company at almost £18bn.

Pittsburgh-based PPG had said after its initial rejection it was confident about reaching a deal with Akzo.

Elliot Advisors, one of the Dutch company’s biggest shareholders with a stake of more than 3%, has urged Akzo to “engage” with PPG.

Elliott said the revised offer price was a “credible basis for engagement”, representing a premium of almost 40% to Akzo’s share price before the first bid was announced.

An “overwhelming majority” of Akzo shareholders agree, according to a survey by Sanford C. Bernstein, Elliott added.

Another large shareholder said it remained ambivalent about a deal, but that a slightly higher offer “could be tempting”.

The investor, who did not want to be named, said: “Certainly at this price we would believe it is up to management to convince us not to sell, as Akzo has been ‘cheap’ for a long time.”

On Monday, four provincial governors spoke out against an Akzo takeover, saying it would hurt Dutch jobs.

Akzo said the second proposal did not address its initial concerns, which included the valuation, risks that the deal might not be accepted by regulators, the leverage of the merged company, and job losses.

The company’s board unanimously turned down the new offer, saying it did not warrant “engagement” with PPG.

Chief executive Ton Buechner said Akzo was “best placed to unlock value within the company ourselves”.

The company said it would “provide updated financial guidance and hold an upcoming investor event soon”.


Source: BBC

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