March 17 Activist investor Elliott Management
owns shares in Akzo Nobel NV, a person familiar with
the matter said on Friday, potentially adding pressure on the
Dutch paint maker to consider a sale to U.S. coatings
manufacturer PPG industries Inc.
The Wall Street Journal reported earlier on Friday, citing
sources, that Elliott had expressed concerns to Akzo Nobel's
management about not engaging with PPG and not consulting with
the hedge fund.
The source asked not to be identified because Elliott's
position in the company, which is below the 3 percent stake
reporting threshold in the Netherlands, is not public. Akzo
Nobel and Elliott declined to comment.
While Elliott could help organize more Akzo Nobel
shareholders against the company's management, mounting a board
challenge would be tricky. This is because Akzo Nobel awards a
foundation, known as stichting, preferred shares which have
special voting power and can be effective at fending off
challenges from activist shareholders.
Akzo Nobel rejected a 21 billion euro ($22 billion) bid from
larger U.S. rival PPG earlier this month and said it wanted to
"unlock value" by spinning off its chemicals business, which
accounts for roughly a third of sales and earnings, with a 2016
operating profit of 629 million euros on sales of 4.8 billion
Akzo Nobel said PPG's offer was also risky because cost
savings were uncertain, it would lead to a highly leveraged
company, and it stood a good chance of being blocked by
regulators. It also said the deal would be "detrimental to the
societies and economies in which Akzo Nobel operates."
Pittsburgh-based PPG has called its proposal "attractive and
comprehensive." While it has not yet made a second offer for
Akzo Nobel, it remains interested in the company, according to
(Reporting by Greg Roumeliotis in New York and Liana B. Baker
in San Francisco; Editing by Bernard Orr)