MOSCOW (MRC) -- A Dutch court on Monday rejected a request by Akzo Nobel investors for it to take immediate action against the company over its rejection of a takeover bid by U.S. rival PPG Industries, handing the Dutch company a victory in its efforts to repel the U.S. firm's 25 billion euro (USD28 billion) proposed offer, reported Reuters.
The decision ratchets up the pressure on PPG to decide whether to file formal bidding papers for Akzo with Dutch regulators by a June 1 deadline - or walk away for at least six months.
PPG said in a statement after the ruling it was still weighing whether to bid or not.
Presiding Judge Gijs Makkink said Akzo's board had been within its rights to reject entering into talks with PPG. However, he noted the management faced dissent from a large group of shareholders which wanted it to engage in talks with PPG. A group representing around 18 percent of its equity had spoken out in support of the suit, launched by hedge fund Elliott Advisors.
"This is a problem that cannot be ignored by Akzo Nobel," Makkink said, though he left it up to the company to decide what steps it should take to mend the rift.
Elliott Advisors had asked the court to order an extraordinary shareholders meeting to consider a motion to dismiss Chairman Antony Burgmans over the company's decision to reject a proposed takeover offer from PPG worth 25.3 billion euros (USD8.3 billion).
The judge rejected that, saying it amounted to an attempt to force the board of directors to change their strategic direction, which was not a right that shareholders have under Dutch law.
Elliott said in a statement it was "surprised and disappointed" by the ruling.
"Elliott is considering the implications of this judgment for shareholder rights in the Netherlands and for its next steps in relation to Akzo Nobel."
As MRC wrote previously, in mid-May 2017, AkzoNobel rejected a third unsolicited takeover bid from American rival PPG Industries, saying it was not in the interests of shareholders. AkzoNobel said that its own plan, announced in april, to spin off its Specialty Chemicals unit within 12 months to boost growth "offers a superior route to growth and long-term value creation and is in the best interests of shareholders and all other stakeholders." AkzoNobel announced the shakeup after rejecting two earlier PPG bids, saying they undervalued the company.
Akzo Nobel N.V., trading as AkzoNobel, is a Dutch multinational, active in the fields of decorative paints, performance coatings and specialty chemicals. Headquartered in Amsterdam, the company has activities in more than 80 countries, and employs approximately 55,000 people.
MRC