Published: Tue, April 25, 2017
Markets | By Terence Owen

PPG Industries sweetens offer for AkzoNobel

PPG Industries sweetens offer for AkzoNobel

United States chemicals giant PPG Industries has upped the ante in its takeover pursuit of AkzoNobel by sweetening its offer for a second time.

The company has come under pressure in recent weeks after already twice rejecting offers in the increasingly hostile takeover battle with the Pittsburg-based PPG.

Monday, in a letter to Akzo, PPG said its latest offer represents "one last invitation" for Akzo to reconsider its previous denials.

'In accordance with its fiduciary duties and acting under the Dutch governance code the Board of Management and Supervisory Board of Akzo Nobel will carefully review and consider this proposal'.

Akzo's shares closed at 78.20 euros on Friday.

While it made the revised bid public, PPG said it is not a formal offer to buy the company.

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Elliott Advisors, a top-five Akzo investor that has been pressuring the firm to engage in talks with PPG, said the offer "clearly warrants honest engagement". PPG's previous, sweetened bid valued Amsterdam-based Akzo at 90 euros a share with the dividend.

In an attempt to address Akzo concerns over regulation, the latest PPG offer includes a break fee for if the deal is blocked.

'Our revised proposal represents a second substantial increase in price along with significant and highly specific commitments that we are confident Akzo Nobel's stakeholders will find compelling'. Akzo Nobel also responded by announcing plans last week to hive off its speciality chemicals business, in a move that would see 1.6bn returned to shareholders.

Known for its strong-arm tactics, Elliott, which holds a stake worth more than 3%, said it would attempt to oust AkzoNobel's managers if the company refused to commence talks with PPG.

In addition, the Pittsburgh company says it won't relocate any of Akzo Nobel's European productions plants to the U.S.

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