AMSTERDAM (Reuters) - Dutch paintmaker Akzo Nobel’s (AKZO.AS) chairman will step down next April, having angered some major investors by fighting off a 26.3 billion euro ($30.6 billion) takeover bid by U.S. rival PPG Industries (PPG.N).
With 70-year old Chairman Antony Burgmans leaving when his term expires, Akzo will have lost the two men who led the resistance to a deal with PPG following the resignation of Chief Executive Ton Buechner last week on health grounds.
Adding to the pressure on Akzo, its second quarter profit fell short of expectations on Tuesday, while the company dismissed demands made by major shareholder Elliott Advisors for a vote on the immediate ousting of Burgmans.
Akzo and PPG are in a six-month cooling off period which is set to expire in December and analysts said a possible deal could be rekindled as new management beds in.
“The question now is whether Akzo’s board will stay unanimous in its resistance of PPG,” analyst Joost van Beek of Theodoor Gilissen said. “The PPG story is not completely over, they will wait and see if new chances arise.”
Akzo shares traded 0.2 percent higher at 75.42 euros by 1500 GMT, having lost more than 2 percent earlier in the day. They remain well short of a figure of around 95 euros offered in PPG’s final cash and share proposal in April.
Akzo said that shareholders would have their say at an extraordinary meeting on Sept. 8 but with votes limited to the appointment of new Chief Executive Thierry Vanlancker.
Shareholders cannot add items to the agenda because the minimum 60-day term for requests has already expired.
That failed to placate Elliott which wants a vote to try to force out Burgmans. Elliott said that Akzo “has chosen yet again to flout fundamental shareholder rights”, by not giving investors the opportunity to add items to the agenda.
Akzo spokesman Andrew Wood said the meeting was scheduled as early as it could have been and many shareholders had asked for a vote on the CEO “as soon as possible.”
A lawsuit on Elliott’s demand for an extraordinary shareholders’ meeting dealing with Burgman’s position is scheduled to be heard in Dutch court on Thursday.
New CEO Vanlancker said he was sticking to the standalone goals Akzo set itself when it rejected PPG’s offer.
“I see it as my task to accelerate and execute our plans for growth and value creation”, he said in a call with reporters.
Akzo also said it had appointed JPMorgan Cazenove as advisor for shareholder relations after a court in May ordered it to mend fences with investors.
In another effort to reassure shareholders, Akzo said executive pay would be more closely linked to hitting financial targets.
At the Sept. 8 shareholder meeting Akzo will provide further explanations about its refusal of a deal with Pittsburgh-based PPG.
The maker of Dulux paints will at a later moment also seek approval for the proposed spin off of the special chemical business, a central plank in the company’s strategy.
Akzo on Tuesday said its core profit in the second quarter fell 6 percent to 461 million euros, due to weak demand in various markets and higher raw material costs.
Analysts polled by Reuters had forecast operating profit, excluding incidental items, of 496 million euros.
Reporting by Bart Meijer; Editing by Keith Weir