Money and values

22 March 2017 By Olaf Storbeck

The maker of Dulux paint says a sweetened $24 bln approach by U.S. rival PPG is bad not just for shareholders but the community, customers and employees. It’s hard for a suitor to counter those claims. If such defences become the norm, expect fewer takeovers and lower valuations.

This content is for Subscribers only

Subjects

Regions

Context News

Dutch paints and coatings maker Akzo Nobel rejected a second takeover approach from U.S. rival PPG Industries. The non-binding offer values Akzo at 90 euros per share, consisting of 57.50 euros in cash and 0.331 PPG shares, PPG said on March 22.

Excluding Akzo’s dividend of 1.28 euros, which will be paid in April, the offer is worth 88.72 euros and values the company’s equity at 22.4 billion euros ($24.2 billion). PPG said the merger would generate annual synergies of at least $750 million.

PPG had already tabled an offer of 83 euros per share, including the dividend, which Akzo said it rejected on March 9.

Excluding the dividend, the second offer represents a 38 percent premium to Akzo’s closing price on March 8.

Akzo said the new bid substantially undervalues the company and does not address concerns about antitrust hurdles, leverage and job losses. It added that the offer “does not meaningfully address our concerns regarding community contribution and sustainability and the significant culture gap between both companies”.

Shares in Akzo were trading down 3.5 percent at 73.94 euros at 0950 GMT.

Email a friend

Please complete the form below.

Required fields *