AkzoNobel Turns Down Another PPG OfferMay 9th, 2017 by Editor
Dutch chemicals company AkzoNobel has rejected a third takeover bid from U.S.-based PPG, both companies announced Monday.
AkzoNobel produces coil and extrusion coatings for glazing systems and other façade elements. PPG exited the glass manufacturing business last year when it sold that segment to Mexico-based Vitro, though the company still supplies coil and extrusion coatings for curtainwall, storefront and metal panels. The firms are also well known for their paint products, among other offerings for a wide variety of applications, including in the architectural and industrial segments.
PPG has been courting AkzoNobel since at least early March, having pitched two acquisition offers that month—the latter for $24.2 billion, which was followed by a revised proposal in April. The most recent offer was for approximately $27 billion, which AkzoNobel again asserts is an undervaluation of the business.
“As part of our fiduciary duties we conducted an extensive review of the third proposal from PPG,” AkzoNobel CEO Ton Buchner said in a statement. “… The PPG proposal undervalues AkzoNobel, contains significant risks and uncertainties, makes no substantive commitments to stakeholders and demonstrates a lack of cultural understanding.”
PPG also issued a statement, saying it is “disappointed that AkzoNobel has once again refused to enter into a negotiation regarding a combination of the two companies,” and that AkzoNobel is “ignoring the best interests of its stakeholders, including long-term shareholders who overwhelmingly support engagement.”
Both companies confirmed PPG CEO Michael McGarry, along with the company’s lead independent director Hugh Grant, met with Buchner and AkzoNobel supervisory board chairperson Antony Burgmans on Saturday. According to PPG, the meeting lasted less than 90 minutes, and AkzoNobel representatives stated up front that they did not have the intent nor the authority to negotiate.
In April, AkzoNobel outlined plans to separate its specialty chemicals segment from its coatings business, and the company reiterated its commitment to do so in the latest announcement.