Dutch paint maker Akzo Nobel has rejected a third takeover proposal from larger U.S. rival PPG Industries, valued at 26.9 billion euros ($29.51 billion). As Sara Hemrajani reports, that's despite a group of Akzo Nobel shareholders pushing for talks.
Third time isn't the charm for PPG Industries. The American company has been brushed off by Akzo Nobel once again. The Dutch owner of Dulux paint has rejected a third takeover offer from its rival. The deal would have been worth 26 billion euros, but Akzo says it undervalued the firm, faced antitrust risks and didn't address other "cultural" issues. In a statement, PPG said it was "disappointed" by the refusal to enter negotiations, and some Akzo investors feel the same way. SOUNDBITE: Mike Ingram, Market Strategist, BGC Partners, saying (English): "We're now in a situation where the Akzo Nobel share price is some 30 percent below where the PPG's offer price was. That's a huge valuation gap, that's a huge shareholder value gap. It's not surprising that shareholders, led by Elliot Advisors, are extremely unhappy. So management there continue to be in the firing line and, of course, we should bear in mind that Elliot Advisors only recently demanded that a vote be taken on the replacement of Akzo Nobel's chairman." More than 90 percent of Akzo's shareholder base is foreign, but minority Dutch investors and a leading government minister have been calling for the company to remain independent amid rising nationalist sentiment. The resistance leaves PPG with a difficult decision - make a formal bid without the support of the board, or just give up.