Activist investor Elliott Management Corp. on Friday accelerated its campaign to push Dutch paints giant Akzo Nobel NV to engage in sale talks with U.S. rival PPG Industries Inc., citing research it commissioned that Akzo's go-it-alone plans would put the company's employees at risk.
Elliott said research by chemicals consulting firm ChemQuest showed that a potential tie-up between PPG and Akzo would result in less than a quarter of the layoffs that would be necessitated by Akzo's stand-alone strategy.
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Commenting on the research, Akzo said in a statement: "Akzo Nobel's strategy is about growth. We are creating two world class businesses which we expect to grow faster than the markets...The research published today in no way reflects the reality of our plans."
Akzo last month announced plans to separate its specialty-chemicals division through either a spin off or outright sale, part of an effort to create more value for shareholders and resist an increasingly aggressive takeover bid by PPG.
"Elliott believes there is a strong probability that Akzo Nobel employees would have greater job security and significantly more growth opportunities in a combined PPG and Akzo Nobel scenario than they would under the stand-alone scenario," the investment firm said in a statement.
Since March, Elliott and some of Akzo's other major investors have led an active effort to force the Dutch firm to start negotiations with Pittsburgh-based PPG.
The U.S. company last month raised its takeover bid for Akzo to EUR24.6 billion, in its third attempt in a two-month-long, unsolicited courtship. PPG increased its offer price for Akzo to EUR96.75 a share, up from its second bid of EUR88.72 a share. PPG's initial approach at the start of March was at EUR83 a share.
Akzo has confirmed it received the latest offer and is in the process of considering it, management said last week.
Elliott's newest attempt to get Akzo to sit down with PPG comes less than two weeks after Akzo's board rejected a request by Elliott and other investors to hold an extraordinary shareholder meeting to oust the company's supervisory board chairman. Akzo also reiterated its support for Chairman Antony Burgmans, who has been seen as an obstacle to a deal with PPG.
PPG's most recent offer appeared to address some of Akzo's concerns over how a takeover could affect its stakeholders, including commitments to maintain Dutch jobs and a promise not to relocate any of the firm's European Union production facilities to the U.S. PPG also said it would agree to a "significant reverse" breakup fee, as well as a pledge that a future combined company would be listed on both the New York and Amsterdam stock exchanges.
Elliott on Friday called on Akzo to specify how many redundancies the company's stand-alone plan and efforts to expand its profit margins would require.
Akzo should "clarify the number of employee redundancies required to achieve its stand-alone margin guidance so that all stakeholders can more fully evaluate their plans," Elliott said.
The activist investor also said it had been working with ChemQuest since January 2017.
Ben Dummett contributed to this article.
Write to Christopher Alessi at email@example.com
(END) Dow Jones Newswires
May 05, 2017 09:50 ET (13:50 GMT)