Rebel shareholders in Dutch paint maker Akzo Nobel want to oust the company chairman after Akzo refused to engage in takeover talks with U.S. rival PPG Industries.
Elliott Investors, one of Akzo’s largest shareholders, said in a statement it was one of a group of investors that meets the Dutch legal threshold of 10 percent support needed to call an extraordinary shareholders meeting to vote on a proposal to remove Chairman Antony Burgmans.
It has asked Akzo to begin preparing such a meeting, a process that takes eight weeks.
Elliott and other investors have pushed Akzo to hold talks with U.S. coatings manufacturer PPG after Akzo rejected a sweetened 22.4 billion euro ($24 billion) cash-and-stock proposal from PPG last month..
Akzo has declined, instead seeking to promote an alternative plan to spin off its chemicals arm, representing about a third of its operations.
“We fail to see how Akzo Nobel could have a meaningful discusssion with shareholders about its plans for a potential separation of the specialty chemicals business while the alternative of a transaction with PPG is being effectively disregarded from the outset,” Elliott said in a letter sent to the company’s management.
“We believe the boards are willfully ignoring the interests of stakeholders in this respect and that they are acting in a self-entrenching and obstructive manner.”
Akzo Nobel spokesman Leslie McGibbon said the company strongly supports Burgmans and the board will respond within 14 days to the request to call an EGM, as required by Dutch law.
“The view of the supervisory Board is that the removal of Mr. Burgmans would be irresponsible, disproportionate, damaging and not in the best interest of the Company, its shareholders and other stakeholders,” the company said.
“Therefore the proposed agenda item to remove Mr. Burgmans will be rejected.”
Akzo plans a meeting with shareholders on April 19 in London to explain its plans to spin off its chemicals business rather than agreeing to PPG’s offer, worth 90.59 euros at current share prices.
Akzo shares traded 0.5 percent higher at 79.47 euros at 0920 GMT (04:20 a.m. EDT) on Wednesday, the gap to the offer price signaling many investors are skeptical PPG’s bid will ultimately succeed.
Most investors and analysts doubt Akzo’s plan can rival in financial terms what PPG is willing to pay.
However Akzo CEO Ton Buechner has argued his plan is better for “all stakeholders” including employees, customers, and the environment.
Pittsburgh-based PPG says that is not true and Akzo should enter talks to better understand the benefits on those fronts that its proposal would include once it is made into a formal bid.
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