Dutch paint giant Akzo Nobel NV said Wednesday its chief executive has resigned for health reasons, but that the company remains on course to spin off its chemicals business to appease shareholders after rejecting a $28 billion takeover bid from U.S. rival PPG Industries Inc.
Ton Büchner's decision comes after a monthslong battle to fend off both PPG's takeover attempt and an aggressive legal and public relations campaign led by Elliott Management Corp., a U.S. activist investor and one of Akzo's largest shareholders, to try to push the company into sale talks.
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Akzo didn't disclose the details of Mr. Büchner's health issues, but said the executive believed that he would "endanger" his health if he continued in the role.
"This is a very recent development--this is not about weeks ago, but is about days ago," Akzo Chairman Antony Burgmans told reporters on a conference call Wednesday. In 2012, Mr. Büchner, 52 years old, took a leave of absence as chief executive for about two months, citing fatigue.
Elliott--which launched a legal challenge earlier this month to remove Mr. Burgmans--declined to comment on Mr. Büchner's resignation.
Akzo is in the process of spinning off its specialty-chemicals business from its paints-and-coatings operations, either through an initial public offering or a sale. The Amsterdam-based company is under pressure from shareholders to complete the deal, after promising such a move would generate more value than selling itself to PPG.
Thierry Vanlancker, the head of Akzo's chemicals business, has been appointed as the company's new chief executive, and said he has no plans to divert from the current strategy.
Mr. Vanlancker joined Akzo in 2016. He was previously a senior executive for Chemours Co., a Wilmington, Del.-based chemicals company spun off from DuPont Co. in 2015.
Pittsburgh-based PPG dropped its takeover bid for Akzo in June after failing to initiate takeover talks despite proposing two sweetened offers following an initial bid in March. Akzo, led by Messrs. Büchner and Burgmans, rejected the offers as too low and argued that completion of the tie-up was far from certain given the complex and lengthy antitrust review a deal would likely face. The company is betting that a spinoff of the chemicals business and a plan to boost dividend payouts would generate more value.
Elliott had argued Akzo couldn't make that decision until first determining if the company could negotiate a better deal through negotiations with PPG.
In May, Elliott, which currently owns 9.5% of Akzo, lost an initial legal battle in the Netherlands to try to remove Mr. Burgmans. Elliott was betting then that Mr. Burgmans's removal would pressure Akzo into sale talks with PPG. Even though PPG has since dropped its bid, Elliott still wants the chairman removed because of the board's handling of PPG's overture.
Earlier this month, it filed a joint petition to convene a general meeting of shareholders to vote on Mr. Burgmans's dismissal.
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(END) Dow Jones Newswires
July 19, 2017 07:13 ET (11:13 GMT)