Dutch AkzoNobel rejects PPG bid; eyes specialty chem ops spin-off

(adds PPG input in last four paragraphs)

SINGAPORE (ICIS)–AkzoNobel has rejected an unsolicited takeover bid made by US-based PPG Industries, and has decided to review strategic options to separate its specialty chemical business, the Dutch paints and coatings firm said on Thursday.

PPG was offering to pay €54.00 in cash and 0.3 of its own shares for every AkzoNobel share, corresponding to a value of €83.00 per share as per 28 February, AkzoNobel said.

“The unsolicited proposal we received from PPG substantially undervalues our company and contains serious risks and uncertainties,” said Ton Buchner, the CEO of AkzoNobel.

“The proposal is not in the interest of AkzoNobel’s stakeholders, including its shareholders, customers and employees, and we have unanimously rejected it,” he said.

AkzoNobel will now consider various alternative ownership structures for the specialty chemicals business as part of the separation plan, including, but not limited to, “the establishment of an independent listed entity”, the company said.

“We are reviewing strategic options to separate it from the company to create focus for both Specialty Chemicals and the Decorative Paints and Performance Coatings group, allowing them to build further on their respective leadership positions,” Buchner said.

PPG confirmed it had made what it described as an “attractive and comprehensive proposal” to Akzo on 2 March on a potential transaction to form a combined company.

“PPG continues to believe there is a strong strategic rationale for the proposed transaction between PPG and AkzoNobel and will carefully evaluate and consider its position and path forward related to its proposal,” it said in a statement.

The company added that it was confident it would be able to execute and complete the proposed transaction and obtain all necessary regulatory approvals.

“We are confident that this combination is in the best interests of the stakeholders of both companies as it presents a unique opportunity to build on the successful legacies of our businesses,” said PPG chairman and CEO Michael McGarry.

Image above: PPG and AkzoNobel make paint. Source: Cultura/REX/Shutterstock