PPG may walk away from Akzo deal

Following Akzo's rejection of their third takeover offer, US based paint company PPG Industries said yesterday it could now walk away from the pursuit of its Dutch competitor, owner of the Dulux brand in the UK.

Reacting to the latest rejection of PPG's offer on 8th May, PPG repeated that it believed the deal would be in the best interests of both companies.

Read - PPG increases offer for Dulux owner Akzo

Read - Akzo plans to spin off Speciality Chemicals business

PPG has been able to gain significant support among shareholders of Akzo, however opposition from its board of directors, Dutch politicians and many of its Dutch staff present difficulties that PPG will have to consider before the 1st June deadline. Under Dutch takeover rules, PPG must decide by 1st June whether it will submit papers to the Dutch Financial Markets Authority (AFM) showing it has financing in place and is serious about launching a formal takeover bid for Akzo. Otherwise PPG would have to step back from making further attempts to pursue Akzo during a six-month cooling off period.

In a statement they said "PPG remains willing to meet with Akzo Nobel to engage in meaningful discussions. But without productive engagement, PPG will assess and decide whether or not to pursue an offer for Akzo Nobel."

Shares in Akzo fell 1.4% to 75.95 euros, far below PPG's cash-and-shares takeover proposal, which is worth 94.39 euros per Akzo share, valuing the Dutch firm at €25.6 billion including debt.

If PPG does file with the AFM, it would still have a final chance to walk away without further costs before launching a formal bid.

Source: Insight Team

Interested in following developments on the PPG/Akzo bid? Sign up for our weekly Insight DIY newsletter here.