US paintmaker PPG Industries raised the tempo in a fierce takeover battle with its rival Akzo Nobel by tabling a third bid that it said valued the Dutch company at €26.9bn.
PPG on Monday made a new cash-and-stock offer for the owner of the Dulux brand of paints at €96.75 a share — a premium of 50 per cent over Akzo Nobel’s undisturbed stock price before the first approach became public in March.
Akzo Nobel’s chief executive Ton Büchner has come under intense pressure from a band of shareholders, led by the hedge fund Elliott, to enter into talks with PPG Industries.
Elliott, known for its aggressive campaigns to influence corporate boardrooms, has also requested a special shareholder meeting for the removal of Akzo Nobel’s chairman.
Columbia Threadneedle, a top-20 shareholder in Akzo, said: “Akzo Nobel have no more room for excuses now and must enter into proper discussions with PPG.”
The revised bid consisted of €61.50 in cash and 0.357 shares of PPG’s common stock, but also included a dividend payment that Akzo’s shareholders are due to receive.
Akzo Nobel said its supervisory and management boards would “carefully review and consider” the proposal, in accordance with its fiduciary duties and acting under the Dutch governance code.
The third unsolicited takeover bid by PPG is the latest twist in what has become a bitter transatlantic tussle for one of Europe’s oldest industrial concerns, which has sparked a political backlash in the Netherlands.
PPG said its latest offer put a value of €26.9bn on Akzo Nobel, including debt and minority interests. That represents an 8 per cent increase on its prior proposal, tabled on March 22, or 17 per cent over its initial bid on March 2.
The US group also said it was extending “one last invitation” to Akzo’s boards to reconsider their stance and engage.
Shares in Akzo Nobel rose 5 per cent on Monday to €82.18, giving the company a market capitalisation of €20.1bn.
A combination of the two companies would create a dominant force in the $130bn global paints and coatings market, at a time of consolidation in the broader chemicals sector.
The Amsterdam-based group has strongly rebuffed its suitor’s two bids, arguing that they undervalued the company and its prospects, would lead to substantial job losses and require significant disposals to appease antitrust regulators.
Instead, it plans to hive off its speciality chemicals division, which makes everything from bleaching substances to salt, either through a flotation or sale.
Last week Akzo Nobel unveiled €1.6bn in dividend payments to shareholders in an attempt to fend off PPG’s advances, at the same time as increasing its financial targets.
Analysts at Bernstein said it would be “tougher [for Akzo Nobel] to say no to a higher offer price and more commitments”.
Attached to PPG’s latest bid were pledges to maintain Akzo Nobel’s strong ties to the Netherlands, including a commitment not to relocate any of its production facilities in Europe to the US.