The world’s leading paint maker AkzoNobel NV yesterday turned down a third revised bid from US-based rival PPG Industries Inc, saying it still undervalued the Dutch company.
“The PPG proposal undervalues AkzoNobel, contains significant risks and uncertainties, makes no substantive commitments to stakeholders and demonstrates a lack of cultural understanding,” AkzoNobel chief executive Ton Buchner in a statement.
Amsterdam-based AkzoNobel, which makes household brands such as Dulux and Trimetal, was responding to a revised offer from PPG late last month which valued the Dutch company at about 24.6 billion euros (US$27 billion).
PPG warned its third offer on April 24 was “one last invitation” to AkzoNobel to “engage with us on creating extraordinary value and benefits for all of AkzoNobel’s stakeholders.”
It offered to buy all the shares in the Dutch company at 96.75 euros per share, an increase of 6.75 euros on a previous bid on March 21. That would have increased the value of the company from 22.4 billion euros to 24.6 billion euros.
However, AkzoNobel’s senior management remained unmoved, saying the group “concluded that PPG’s proposal is not in the best interests of the company, its shareholders and all other stakeholders.”
Buchner reiterated that AkzoNobel “has outlined a compelling strategy to accelerate growth and value creation which we believe will deliver significant long-term value.”
The strategy includes plans to shed its specialist chemicals division and comes after it was buoyed by stronger-than-expected first-quarter profits.
However, AkzoNobel, often seen as a broad barometer for underlying global economic activity, has been under pressure in the increasingly hostile battle with Pittsburg, Pennsylvania-based PPG.
Last week, ratings agency Standard & Poor’s announced it was placing AkzoNobel on “CreditWatch with negative implications” due to “the uncertainty around the policy choices currently available to Akzo regarding future ownership, leverage and strategic direction.”
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