US paint maker PPG has abandoned plans for its ‘friendly’ takeover of Dulux owner, Dutch company AkzoNobel.
This follows the rejection of several informal offers and a Dutch Court’s refusal to allow attempts by a group of shareholders to force a special shareholder meeting aimed at ousting the company’s chairman.
The Court decided that the request was not a legitimate means of scrutinising the chairman’s performance, but rather had the objective “of moving AkzoNobel into negotiations with PPG, aimed at a PPG acquisition,” which contravened Dutch law.
However, the Court also commented that the disagreement between the firm’s board of executives and some of its shareholders was a “problem that AkzoNobel cannot ignore” because the continuing “lack of confidence” between them was detrimental to the company’s performance.
The Dutch Government had urged the company to reject the merger, leading some shareholders to complain that the Netherlands has one rule for Dutch companies buying foreign business and another when the boot is on the other foot.
PPG chief executive Michael McGarry said it had made a final offer for Akzo last week, but the firm did not respond.
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“As a result, we believe it is in the best interests of PPG and its shareholders to withdraw our proposal to AkzoNobel, he said.”