Akzo Nobel's Largest Shareholder Urges Engagement With PPG--Update
March 23 2017 - 11:46AM
Dow Jones News
By Ben Dummett
Akzo Nobel N.V.'s largest shareholder on Thursday became the
latest investor to urge the Dutch paint and chemicals maker to
start negotiations with U.S. rival PPG Industries Inc. over its $24
billion takeover offer.
On Wednesday, Amsterdam-based Akzo rejected a second, sweetened
takeover offer by PPG. But in a letter to Akzo's board, Causeway
Capital Management LLC. said that while PPG's current offer was
"inadequate," it was high enough for Akzo's management to start
negotiations.
"As long-term shareholders, we believe combining Akzo Nobel and
PPG would create a stronger company, and lead to improved prospects
for both shareholders and employees," Causeway Chief Executive
Sarah Ketterer wrote in the letter. The letter was distributed to
reporters Thursday.
Representatives for Akzo and PPG couldn't immediately be reached
for comment.
Akzo's board and management remain opposed to a takeover by PPG,
and investors still see the deal as unlikely. PPG's second approach
came just weeks after Akzo rejected PPG's initial EUR83-a-share
offer. In both cases, Akzo said the offers undervalues the company
and doesn't warrant further talks.
Shares in the Amsterdam-based company were up a bit more than 2%
midafternoon Thursday at EUR77.59, trading at steep discount to the
latest offer price of EUR88.72 a share.
Causeway's move adds to calls by other investors, including U.S.
activist investorElliott Management Corp., to engage in talks. On
Wednesday, Elliot threatened to use corporate rules unique to the
Dutch company's structure to call a special shareholders meeting,
in a bid to force Akzo's board to talk with PPG.
To achieve that goal, Elliott, which owns a 3% stake in Akzo,
says it would need 10% shareholder support. Causeway's support
helps it get there.
Causeway is Akzo's largest shareholder with a stake of around
6.8%, according to FactSet. It oversees about $44.3 billion in
assets and invests in equities globally.
Write to Ben Dummett at ben.dummett@wsj.com
(END) Dow Jones Newswires
March 23, 2017 11:31 ET (15:31 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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