PPG Seeks Extension for Akzo Bid While Holding Firm on Price
PPG CEO Sees No Reason to Raise Bid for Akzo, May Lower Offer
(Bloomberg) -- PPG Industries Inc. Chief Executive Officer Michael McGarry is seeking to extend by two weeks a deadline to make a firm bid for Akzo Nobel NV and ruled out raising its latest $29.5 billion offer, the third to be rejected by the Dutch rival.
The U.S. paint maker will challenge a June 1 deadline imposed by the Dutch regulator before which it has to make an offer for Akzo Nobel or walk away for six months, McGarry told reporters on Tuesday in Amsterdam, where the Dutch company is based. In setting the date under the stock market rules, the clock should have started on March 22, he said.
“Right now we’re challenging the Dutch regulator on whether the June 1 date is appropriate,” the CEO said. “We think the date should actually be either June 14 or June 15. We have asked them to substantiate their position.”
The wrangle with the regulator is the latest twist in the battle for control of the Dutch paint and coatings maker. The two sides, along with activist shareholder Elliott Management Corp., spent a day in court Monday over a separate dispute. PPG has been considering whether to take its offer directly to shareholders since Akzo Nobel rejected the latest offer two weeks ago.
Investors including Elliott have called for the Dutch company to start talks, but management led by Chairman Antony Burgmans and CEO Ton Beuchner argue that the approach undervalues the company. A Dutch court ruling on whether Akzo Nobel should hold a vote on the removal of Burgmans is scheduled for May 29, and PPG will wait for the verdict before deciding its next move, McGarry said.
Last Price
The most recent bid is as high as the company is prepared to go, the PPG CEO said. The Dutch company’s plan to remain independent offers less value for investors and most shareholders are calling for a negotiation, he said. PPG would consider adjusting the terms of the offer to address employment concerns and all financing for the takeover is in place, McGarry said.
Akzo Nobel shares rose 1 percent to 76.49 euros as of 3:04 p.m. in Amsterdam, valuing the company at 19.3 billion euros ($21.7 billion).
McGarry’s comments come a day after he appeared at the court case brought by Elliott to force a vote on the removal of Burgmans, who is seen as the main obstacle to takeover talks. At the hearing, he urged the Dutch company to listen to shareholders who are in favor of a deal.
“What we saw yesterday is that the number of shareholders that are upset with them is incredible,” McGarry said.
To contact the reporter on this story: Ellen Proper in Amsterdam at eproper@bloomberg.net.
To contact the editors responsible for this story: Tara Patel at tpatel2@bloomberg.net, John Bowker