Hedge fund goes to court seeking to oust Akzo Nobel chairman
Elliott Advisors, the hedge fund that has been pushing Dutch paint maker Akzo Nobel (AS:AKZO) to enter takeover talks with U.S. peer PPG Industries, said on Tuesday it had launched legal action to try to oust Akzo chairman Antony Burgmans.
Akzo has said PPG’s bid is too low and lacks firm commitments to the company’s stakeholders, including employees and environmental interests. The company’s boards prefer their own plan to avoid a PPG takeover by issuing extra dividends and selling or floating Akzo’s chemicals division, representing about a third of profits.
Analysts say Akzo’s plan is not as attractive for shareholders as PPG’s 96.75 euro per share offer. Akzo shares were trading 0.1 percent higher at 76.88 euros on Tuesday.
Elliott said it had filed a suit with Amsterdam’s Enterprise Chamber petitioning judges to order an extraordinary general meeting (EGM) of shareholders to debate Burgmans’ dismissal.
Under Dutch law, shareholders representing a 10 percent stake have the right to ask the company to call an EGM. Elliott, with a 3.25 percent stake, had earlier assembled a group of investors meeting the threshold and requested Akzo call such a meeting. The company declined, saying it supported Burgmans and an EGM would not be in the company’s best interests.
Akzo spokesman Leslie McGibbon said Elliott’s decision to go to court was “incredibly disappointing.”
“We’ve conducted an extremely thorough review of all proposals from PPG, including engagement” between Burgmans and PPG CEO Michael McGarry “exactly as Elliott requested,” McGibbon said, adding Akzo’s handling of PPG’s proposals had followed Dutch corporate governance rules.
Elliott’s legal fight complicates the timeline for the Akzo-PPG takeover struggle.