PPG Industries reiterates takeover talks invitation to AkzoNobel

PPG Industries has reiterated its interest in entering into discussions with Dulux maker AkzoNobel to form a combined company.

The statement on Wednesday came after AkzoNobel rejected a second unsolicited offer from the US chemicals manufacturer on 22 March, saying it substantially undervalues the company.

The revised proposal represented a value of €88.72, adjusted for the final dividend, consisting of €56.22 in cash and 0.331 PPG shares, as at 20 March 2017, per AkzoNobel share. PPG had previously offered €83.00 per share.

But Akzo said at the time that the proposal neglected to address the significant uncertainties and risks for shareholders and other stakeholders.

However, PPG said it continues to believe that a merger of the two companies has "a strong strategic rationale".

Chairman and chief executive officer Michael McGarry said: "We made a compelling offer to AkzoNobel that provides its shareholders with a significant premium and the opportunity to benefit from the upside potential of a stronger company that is well positioned for future growth and value creation. Together, we can create a stronger company that will benefit all of AkzoNobel’s stakeholders, including its Netherlands-based employees.

"PPG believes AkzoNobel should honour growing requests to engage and fully consider all relevant options to create the most value for all of its stakeholders, and benefit from the multiple months of preparation already completed by PPG."

Following Akzo's rejection of the second offer in March, private investment firm Elliott Management Corp, which owns a 3% stake in the group, "noted with concern" its failure to engage with PPG in relation to the two bids it has put forward.

"Elliott has not found the reasons proffered by Akzo Nobel's Boards for failing to engage compelling," it said in a statement.

Elliott said that while the second bid was "inadequate", it was a "credible basis for engagement", representing a 39.7% premium to AkzoNobel's undisturbed price.

At 1250 BST, Akzo shares were up 0.7% to €78.48.