Akzo Nobel can use protection mechanisms against new bid from PPG (translated)
Akzo Nobel can use several protection mechanisms against a new bid from PPG, the Dutch daily Het Financieele Dagblad reported, citing Rients Abma, executive director of Eumedion, an umbrella organization for institutional investors.
Akzo Nobel’s board of directors can use several protection mechanisms if it believes that is necessary for the continuity of the company and if it is in the best interest of the company, Abma said.
One of these mechanisms lies with the priority shares owned by the Foundation Akzo Nobel. These priority shares give the foundation the right to choose the company’s board of directors and its board of governors. Earlier the foundation said that it will only use this right under ‘exceptional circumstances’. This may not prevent a takeover of the company, but it would mean that the party that acquires Akzo Nobel has no influence on the board, which would make the company less attractive, the report said.
Another option is that Akzo Nobel can dispense new shares worth 10% or 20% of the current share capital, the report said. These shares could be owned by a friendly partner of Akzo Nobel.
However, all these options are temporary, Abma said. They are meant to keep the board sitting and to give the board more time to find a solution.
In the meantime the pressure on the company is growing, the report said. On Friday one of Akzo Nobel’s shareholders, Henderson Global, insisted that Akzo Nobel start talks with PPG. Henderson Global Europe director John Bennett also asked PPG to come talk with the shareholders, so that the shareholders can evaluate the benefit of PPG’s bid. Henderson Global owns EUR 150m worth of Akzo Nobel shares.
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