Botched paint job

8 May 2017 By Olaf Storbeck

The Dutch paint maker’s categorical rejection of rival PPG’s 24.6 bln euro bid creates two glaring problems for boss Ton Buechner. His self-imposed targets are fanciful, and many shareholders doubt his judgement on the deal. Should PPG go hostile, two battles will become three.

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Dutch paint and coatings maker Akzo Nobel on May 8 rejected a third takeover proposal from U.S. rival PPG Industries, which on April 24 had offered 96.75 euros per Akzo share in a part-cash, part-share transaction, valuing Akzo’s equity at 24.6 billion euros.

That price represented a 50 percent premium to where Akzo shares traded before PPG's interest became known on March 9.

"The PPG proposal undervalues Akzo Nobel, contains significant risks and uncertainties, makes no substantive commitments to stakeholders and demonstrates a lack of cultural understanding," Akzo chief executive Ton Buechner said in a statement.

PPG on May 8 said it was “disappointed” about Akzo’s decision.

PPG must now decide whether it will move to a formal bid ahead of a June 1 deadline under Dutch securities laws without the support of Akzo's board.

Akzo Nobel’s shares had fallen 2.4 percent to 77.47 euros on May 8 at 0946 BST.

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