BRUSSELS, May 30, 2017 (RISI) -A Dutch court on Monday ruled in favor of chemical giant AkzoNobel and against a minority shareholder who was attempting to force the removal of the firm’s chairman.
The case, brought by Elliott Advisors, was filed after AkzoNobel rejected three unsolicited takeover offers from the US firm PPG Industries. The minority shareholder claimed that AkzoNobel had failed to meet its fiduciary and corporate governance duties when it rebuffed PPG and declined to negotiate a possible sale and was demanding a vote on the dismissal of the firm’s chairman Antony Burgmans.
An AkzoNobel representative toldPPI Europethe firm “is very pleased that the Enterprise Chamber has decided that its boards have acted in accordance with the highest standards of Dutch corporate governance and it confirms the position/acting of the chairman.” She added that the firm would continue to have a “constructive dialogue” with its shareholders.
For its part, an Elliott Advisors spokesperson said the firm was “surprised and disappointed” with the ruling. “Elliott is considering the implications of this judgment for shareholder rights in the Netherlands and for its next steps in relation to AkzoNobel,” she added. Elliott has the option of appealing the decision to the Dutch Supreme Court.
In the wake of the ruling, PPG said it would now decide whether to continue its takeover efforts. “The matter before the Enterprise Chamber was between AkzoNobel and certain shareholders who have clearly stated that constructive engagement between AkzoNobel and PPG is in the best interest of all stakeholders. PPG remains willing to meet with AkzoNobel regarding a potential combination of the two companies, but without productive engagement, PPG will assess and decide whether or not to pursue an offer for AkzoNobel,” PPG said in a statement.
By Dutch law, PPG has until June 1 to decide on whether to present its offer directly to AkzoNobel shareholders in what would effectively be a hostile takeover bid, or step away for a six-month cooling down period. PPG has filed a request with the Dutch securities regulator to extend the deadline for a direct bid to June 14 or June 15.