AkzoNobel rejects third PPG takeover bid
AkzoNobel has revealed that it has declined the proposal of US counterpart PPG industries to acquire all the outstanding ordinary shares for the third time.
AkzoNobel explained that the decision was taken after a careful consideration and an extensive review process by its supervisory and management board with the PPG board members.
The paints and coatings manufacturer concluded that the terms mentioned in the PPG proposal did not serve the interests of its shareholders and other stakeholders.
The company tested PPG’s proposal on four key areas namely, value, certainty, timing, and stakeholder considerations.
The analysis made by AkzoNobel concludes that PPG’s proposal has undervalued its share price and failed to reflect its current and future value. The Dutch company has presented a clear strategy to increase shareholder returns for this year, and PPG’s proposal does not match such commitments.
AkzoNobel stated that it believed this to be the first time that PPG has undertaken an acquisition of this size, and the present proposal is reported to be around eight times bigger than the previous acquisition conducted by PPG.
It has been clear since PPG submitted an initial proposal that anti-trust clearance would play a major part in the deliverability of the proposal, given the significant geographic and segment overlap that exists between the two companies.
Though PPG has submitted an initial proposal for anti-trust clearance, it has not provided any details on how it would neutralise the anti-trust risks for AkzoNobel stakeholders.
Considering the above factors, AkzoNobel has revealed that the PPG’s proposal is not in the best interests of the company, its shareholders and all other stakeholders.
AkzoNobel CEO Ton Buchner said: “As part of our fiduciary duties we conducted an extensive review of the third proposal from PPG. This process included myself and Antony Burgmans meeting with the CEO and lead independent director of PPG to understand their proposal in more detail.
“The PPG proposal undervalues AkzoNobel, contains significant risks and uncertainties, makes no substantive commitments to stakeholders and demonstrates a lack of cultural understanding.
“By contrast, AkzoNobel has outlined a compelling strategy to accelerate growth and value creation, which we believe will deliver significant long-term value for our shareholders and all other stakeholders.
“We will deliver this within a clear timeline, without the substantial level of risks and uncertainties attached to the alternative proposal.
“We have a strong track record of delivering on our commitments and are fully focused on accelerating growth momentum and enhanced profitability with the creation of two focused, high-performing businesses, paints and coatings and specialty chemicals, which will lead to a step change in growth and long-term value creation for shareholders and all other stakeholders.”