Dutch AkzoNobel CEO resignation unlikely to change company’s plans – analysts

LONDON (ICIS)–The resignation of AkzoNobel’s CEO Ton Buchner is unlikely to inspire a renewed bid from US counterpart PPG nor is it likely to impact on the future of the company’s specialty chemicals business, according to analysts at European investment banks on Wednesday.

The Dutch specialty chemicals and coatings major announced early on Wednesday that Buchner (pictured right) had stepped down with immediate effect “due to health reasons”, and will be replaced by Thierry Vanlancker.

Markus Meyer, an analyst at Germany’s Baader Bank, said Buchner’s resignation “is neither an indication that a renewed PPG bid with a higher success chance might occur nor that the activist investors were (partly) successful.

“The main blocking factor for the PPG takeover was not CEO Buchner but AkzoNobel’s supervisory board which is still in place and therefore the situation has not changed due to the CEO change, in our view.

The German bank placed its 12-month share price target forecast for the Dutch company at €65, with a ‘Sell’ recommendation on the stock.

AkzoNobel shares were trading on Wednesday at €78.29 by 10:45 London time, up from Tuesday’s closing price at €77.95.

“Ton Buchner had already to take a break due to heath reasons several years ago and therefore we also believe that the official reason is also the real reason for the change,” conclude Mayer.

Prior to his appointment as the new company CEO, Vanlancker, a Belgian national, was head of the company’s specialty chemicals business.

A successor for Vanlancker has not yet been announced.

Switzerland’s UBS said the lack of announcement with regards a successor to Vanlancker could raise questions about the proposed separation of the specialty chemicals business.

The analysts, however, admitted that the immediacy of Buchner’s decision would mean it is no surprise a replacement to head the specialty chemicals business has not yet been confirmed.

“With Ton’s resignation coming only yesterday, we think this is of no surprise and we await news on personnel announcement for the new entity in due course.

“In the meantime, we assume that Vanlancker, together with the CFO and the supervisory board, will continue negotiations on the separation of [specialty] chemicals.”

The Swiss bank placed a ‘Neutral’ rating on AkzoNobel’s stock, with a 12-month share price target of €78.

AkzoNobel’s chairman, Antony Burgmans, lamented Buchner’s resignation, adding he had been an “outstanding leader” for the company during his tenure as CEO.

“His focus on delivering for our customers and operational excellence has driven profitability to record levels, increasing returns to shareholders,” he said.

Buchner himself said that the decision to step down was a difficult one but he must focus on his health going forward.

“It was a privilege to work for AkzoNobel and I am extremely proud of all the achievements the team delivered during my five years at the company,” he said.

Focus article by Niall Swan

Additional reporting by Pearl Bantillo