PPG again urged coatings rival AkzoNobel to sit down and hammer out a deal to be acquired, saying it can inject more value into the Dutch company than Akzo’s own strategic plan will do.
In an open letter to Akzo’s stakeholders on Monday, Michael McGarry, PPG’s chairman and chief executive, said Akzo’s plan to unlock value by spinning out its chemicals business “will be more risky, create more uncertainty for AkzoNobel employees, leave AkzoNobel with stranded costs from the divestiture, and create less value than our proposal.”
PPG last month made two offers to buy Amsterdam-based Akzo with the latest bid valued at $26 billion, or 90 euros per share including a dividend.
Despite mounting pressure from its shareholders to negotiate with PPG, Akzo rejected the bids saying they undervalued the company and put jobs at risk.
Akzo, which makes Dulux and other paint brands, is scheduled to unveil its own plan Wednesday.
PPG, maker of Olympic, Glidden and Pittsburgh Paints, has not ruled out pursuing a hostile takeover of Akzo.
In his letter, Mr. McGarry noted that when PPG bought Akzo’s North American decorative paints unit several years ago, it followed through on all of its commitments “because we had access to appropriate levels of due diligence.”
If it succeeds in buying all of Akzo, “PPG is prepared to make similar commitments with clear solutions to the stakeholders’ concerns,” Mr. McGarry said. “This is only possible, though, when PPG and AkzoNobel sit down constructively together.”
PPG’s shares rose Monday to $105.39, up 97 cents. Financial markets in The Netherlands were closed Monday for the Easter holiday.
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