PPG throws in towel and abandons quest for AkzoNobel
- Author: Leroy Wright Jun 01, 2017,
Jun 01, 2017, 23:09
"We made a final attempt for engagement late last week and through a letter to AkzoNobel", McGarry added.
PPG chief executive Michael McGarry said the USA company had been "hopeful" AkzoNobel "would see the merits of our compelling proposal to combine our two great companies and create significant shareholder value".
A large group of Akzo Nobel shareholders led by hedge fund Elliott Advisors on Monday lost a bid in court to try to force Akzo's boards to engage in talks with PPG.
Akzo Nobel rejected the USA company's third takeover bid May 8, defying pressure from shareholders such as Elliott Management Corp to negotiate.
Some analysts considered PPG's bid for Akzo as a strategic response to that pact.
The capitulation marks a setback in PPG's efforts to strengthen its global reach and allows it to offer customers a broader portfolio of paints and coatings.
Akzo Nobel said in a statement it would pursue a strategy of "accelerating sustainable growth and profitability and creating two focused, high-performing businesses". "It's not a mega surprise that PPG is withdrawing". PPG also offered as much as 50 million euros towards retaining top management. Under Dutch law, PPG had to make a decision today to pursue a formal takeover attempt or pause for a six month cooling off period.
Sherwin-Williams Co. agreed previous year to acquire Valspar Corp. for $9.3 billion.
Akzo Nobel has held firm to its alternative plan to break into two companies focused on chemicals and coatings.
Akzo chief executive Ton Buechner said he believes the company's new strategy will lead to a "step change in growth and long-term value creation for our shareholders and all other stakeholders".
Elliott started legal proceedings after Akzo rejected calls for an extraordinary general meeting to vote on Burgmans' position.
The fund claimed he was in "flagrant breach" of his duties to investors for rejecting PPG's offers. The U.S. company failed this week win an extension of that deadline.
Akzo Nobel shares traded down 0.2 percent at 74.34 euros at 1310 GMT - far below the figure of around 95 euros per share that PPG's final cash and share proposal in April represented.