Dutch paints and coatings giant AkzoNobel said it rejected “a second unsolicited, non-binding and conditional proposal” from Pittsburgh-based rival PPG Industries to buy AkzoNobel for about $24.2 billion.
“The proposal not only fails to reflect the current and future value of AkzoNobel, it also neglects to address the significant uncertainties and risks for shareholders and other stakeholders,” said the Dutch company in a statement.
“The management board and supervisory board of AkzoNobel, together with their financial and legal advisors, have thoroughly reviewed the second proposal taking into consideration the interests of AkzoNobel’s shareholders, customers, employees and other stakeholders.
“The revised proposal represents a value of €88.72 (adjusted for final dividend) consisting of €56.22 (adjusted for final dividend) in cash and 0.331 PPG shares, as at 20 March 2017, per AkzoNobel share.”
AkzoNobel CEO Ton Büchner said: “This proposal significantly fails to recognize the value of AkzoNobel.
“Our boards do not believe it is in the best interest of AkzoNobel’s stakeholders, including our shareholders, customers and employees. That is why we have rejected it unanimously.
“We are convinced that AkzoNobel is best placed to unlock the value within our company ourselves.
“We are executing our plan, including the creation of two focused businesses and new cost structure, and believe this gives us a strong platform for continued profitability and long term value creation for all our stakeholders with substantially less execution risks.”
PPG claimed its revised proposal was worth €90 a share including Akzo’s dividend, comprised of €57.50 cash and 0.331 share of PPG common stock.
PPG CEO Michael McGarry said: “We believe the revised proposal presents an opportunity for AkzoNobel’s shareholders to realize extraordinary value, by any measure, for their shares in AkzoNobel.
“It provides them with a premium valuation and the opportunity to receive substantial and immediate cash consideration and participate in the success of the enterprise through ownership of shares in the combined company.”
AkzoNobel said its €90 (cum dividend) per share proposal would provide a 40% premium to AkzoNobel shareholders based on AkzoNobel’s unaffected closing stock price of €64.42 on March 8, 2017, and is 39% above AkzoNobel’s 52-week high stock price prior to disclosure of PPG’s earlier proposal.
“A combination of PPG and AkzoNobel would result in enhanced financial growth prospects for the combined company in the coming years, which will also accrue to the benefit of all stakeholders of the combined business,” said McGarry.
“We are hopeful that AkzoNobel engages with us promptly in order to further discuss and explore the benefits of a combination for its stakeholders, including substantial commitments regarding employees in The Netherlands, research and development and sustainability.”