THE HAGUE: The world’s leading paintmaker AkzoNobel on Monday snubbed a new takeover bid from US-based rival PPG, saying it still glossed over the Dutch company’s true value.
“The PPG proposal undervalues AkzoNobel, contains significant risks and uncertainties, makes no substantive commitments to stakeholders and demonstrates a lack of cultural understanding,” chief executive Ton Buchner said in a statement.
Amsterdam-based AkzoNobel, which makes household brands such as Dulux and Trimetal, was responding to a third revised offer from PPG late last month which valued the Dutch company at about 24.6 billion euros ($27 billion).
Investors did not appear to be particularly pleased with the development, however, and AkzoNobel’s share price dropped more than three percent to below 77 euros on the Amsterdam stock exchange’s AEX index shortly after opening at 0700 GMT.
It recovered slightly, but was still down 2.8 percent to 77.16 euros a share in early afternoon trading. PPG had warned its third offer was “one last invitation” to AkzoNobel to “engage with us on creating extraordinary value and benefits for all of AkzoNobel’s stakeholders.”
The offer price was 96.75 euros per share, 6.75 euros more than in a previous bid in March.
That would have increased the value of the company from some 22.4 billion euros to 24.6 billion euros.
But AkzoNobel’s senior management remained unmoved, even after meeting PPG’s top bosses Michael McGarry and Hugh Grant on Saturday in Rotterdam.
“We went into the meeting with an open mind,” Buchner told reporters during a teleconference, saying he thought it was concluded “respectfully and cordially”.
“We did not hear any new things, or more tangible or more clear commitments or solutions,” he said. “After extensive consideration, the company has concluded that the interests of shareholders and other stakeholders are best served by its own strategy to accelerate growth and value creation,” AkzoNobel added.
PPG in return issued a strong statement, saying it was “disappointed that AkzoNobel has once again refused to enter into a negotiation regarding a combination of the two companies.”
“The meeting lasted less than 90 minutes,” it said of Saturday’s talks.
“Specifically, the AkzoNobel chairs stated up front that they did not have the intent or authority to negotiate,” PPG said, adding Monday’s decision “reflects a continued lack of proper governance” by the company’s board.
Formed in 1994 when Dutch firm Akzo merged with Swedish chemical maker Nobel, the group said the proposed takeover by PPG came with “significant integration risk,” and gave no indication as to how it would secure the relevant anti-trust clearances.—AFP
