LONDON/AMSTERDAM (Reuters) - Hedge fund firm Elliott Management on Monday asked the board of Dutch paintmaker Akzo Nobel (AKZO.AS) to respond urgently to its concerns about the nomination of a new chief executive.
Elliott, Akzo’s largest shareholder with a 9.5 percent position, has been repeatedly rebuffed by the company after pushing for the board to engage with rival PPG Industries (PPG.N) over a 26 billion euro ($30 billion) takeover bid it rejected multiple times.
Paul Singer’s activist fund called on Akzo to confirm the date of a shareholder meeting to vote on the appointment of Thierry Vanlancker as the new CEO and to confirm shareholders will be given the right to add resolutions to the next meeting.
Failing to do so would “exacerbate the crisis of confidence between Akzo Nobel and its shareholders”, Elliott said.
It referred to a verdict by an Amsterdam court in May, which ordered Akzo Nobel to repair relationships with its major shareholders.
Vanlancker, 52, stepped into the role of CEO last week after his predecessor Ton Buechner quit suddenly for health reasons. Chemicals division chief Vanlancker joined the company only in 2016.
Elliott, which manages $33 billion in assets, said it was making its questions public after Akzo Nobel refused to engage and after it cancelled a recent meeting with the U.S. activist at short notice.
The hedge fund is currently pursuing court action to oust Chairman Antony Burgmans, whose third term on the supervisory board ends in 2018, over the rejected PPG bid.
Elliott also called on Akzo Nobel to urgently clarify the views of the new CEO and the supervisory board on the separation of the Specialty Chemicals business and the credibility of Akzo’s 2020 targets.
In their struggle to prevent a merger with PPG, Buechner and Burgmans in April promised higher sales and margins. Elliott said these goals were not considered credible and indicated that they should largely determine the management team’s pay, with clawbacks if targets were missed.
An Akzo spokesman declined to comment when contacted by Reuters. The company will publish its results for the second quarter on Tuesday.
Akzo Nobel shares traded down 1.6 percent in Amsterdam on Monday.
Reporting by Maiya Keidan and Bart Meijer; editing by Susan Thomas and Keith Weir