Earnings, Finance

Akzo Nobel major shareholder’s insisting on Merger & Acquisition

According to reports on Thursday, Amsterdam-based Akzo Nobel N.V.’s largest shareholder have advised company to start talks with U.S. rival PPG Industries Inc. over its $24 billion acquirement bid day.

This arrives day after the Dutch paint and chemicals maker Akzo denied a second, sugared takeover offer by PPG. However in a letter to Akzo’s board, Causeway Capital Management LLC. said that while PPG’s existing offer was “inadequate,” it was high enough for Akzo’s management to start talks.

Causeway is reportedly Akzo’s biggest shareholder with a stake of almost 6.8%. It oversees about $44.3 billion in assets and invests in equities globally.

“As long-term shareholders, we believe combining Akzo Nobel and PPG would create a stronger company, and lead to improved prospects for both shareholders and employees,” Causeway Chief Executive Sarah Ketterer said in a statement.

Representatives for Akzo and PPG couldn’t immediately be reached for comment.

Meanwhile both Akzo’s board and management seemed against the deal with PPG, and investors still see the deal as unlikely.

PPG’s latest bid arrived just weeks after Akzo denied PPG’s initial EUR83-a-share offer. In both cases, Akzo said the offers was not enough and doesn’t warrant additional talks.

This Causeway’s plea adds to calls by other shareholders, including U.S. activist investor Elliott Management Corp., to hold talks.

Furthermore, Elliot said in a statement that it will use the corporate rules unique to the Dutch company’s structure to call a special shareholders meeting, with an aim to force Akzo’s board to talk with PPG. Elliott, which owns a 3% stake in Akzo, said it will require at least 10% shareholder support. If Causeway’s add support, that will be possible.

Causeway is Akzo’s largest shareholder with a stake of around 6.8%, according to FactSet. It oversees about $44.3 billion in assets and invests in equities globally.

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