AkzoNobel reports shareholder Elliott to financial authorities following calls to remove chairman

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The private investment firm and Akzo have been at odds since Akzo - in which Elliott owns a 3% stake - rejected two takeover bids from U.S. chemicals manufacturer PPG Industries, saying they undervalued the company.

"Elliott Advisors is an FCA regulated entity and is, therefore, aware of its various regulatory obligations, including obligations related to handling price sensitive, or potentially price sensitive, information".

Akzo said it shared its findings with Dutch financial regulators and said it "calls on Elliott Advisors and PPG to clarify their relationship and the history of the communications between the two companies".

Akzo rejected a pair of offers handed in by PPG, but a number of shareholders, including Elliott are in favor of the bid.

The group said it would consider the EGM request, as is required under Dutch law, and respond to Elliot within 14 days.

While Akzo is due to hold its regular annual general meeting on April 25, an extraordinary general meeting would allow shareholders to remove Akzo supervisory board and management board members.

PPG is waiting for Akzo to come under more shareholder pressure before making a new acquisition offer, one of the sources said.

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In its response to the letter, Akzo said it fully backed the chairman.

Elliott hopes to add to pressure on Akzo to negotiate a potential sale to USA coatings manufacturer PPG Industries Inc PPG.N , after Akzo rejected a sweetened 22.4 billion euro ($24 billion) cash-and-stock offer from PPG last month. Burgmans is viewed as an opponent to the deal but Elliott has pressed the company to engage with PPG.

Buechner's vision is centered on the separation of a chemicals division, worth an estimated 9 billion euros ($9.6 billion).

Akzo has said it can generate more value for shareholders on its own.

Though it was not immediately clear what rules the US company and the British fund might have violated, both felt obliged to respond.

It wasn't clear if Elliott's move would succeed even if the hedge fund could muster enough votes.

"We're not taking any options off the table", Mr. McGarry said, adding that a higher offer would hinge on "collaborative, substantive" talks between the companies.