AkzoNobel, Dutch paint, coatings, chemicals and other essentials manufacturer and supplier continues to resist PPG Industries’ takeover attempt.
The clock is ticking for PPG. A Dutch court has rejected calls to oust AkzoNobel Chairman Antony Burgmans, and PPG now has until Thursday to either launch a hostile bid or give up.
John Colley, a Professor of Practice in the Strategy & International Business Group at Warwick Business School, offered the following expert comment:
"Michael McGarry, CEO of PPG, has not got that much to lose by going hostile now. Clearly Dutch politicians are not keen on US owners and management are already hostile.
"The court ruling is not good news for shareholders. Corporate governance in Holland is at risk with such a large offer from PPG given such disdain by the board. Shareholders may now be less likely to invest in the country with such limited rights.
"Indeed, shareholders are struggling to make themselves heard as Chairman Antony Burgmans and CEO Ton Buchner continue to turn down bid approaches from PPG.
"The latest bid at €26.9Bn represents a 50 percent premium over the previous undisturbed share price. At this level there can be little doubt that is a better bet than the current board's plan of splitting off the specialty chemicals business and paying €1.6Bn in dividends this year. This level of valuation is unlikely to be seen again in the foreseeable future.
"Even the judge noted that the level of shareholder support is such that it 'cannot be ignored by Akzo Nobel'.
"But the board would clearly prefer to keep their jobs rather than listen to shareholders, despite the fact that Akzo Nobel is a consequence of a significant number of takeovers including the UK-based ICI."