In its ongoing tiff with professional hedge fund bruiser Paul Singer, Dutch chemical giant Akzo Nobel hasn’t exactly played nice. It refuses to hold the emergency meeting Singer demands, at which he hoped to publicly behead the company. It won’t sell itself to the company to which Paul Singer wants it to sell itself; in fact, it won’t sell itself to anyone at all. It even managed to lose the wrong top executive. Oh yea, and it used Singer’s son’s screw-up to accuse the billionaire activist of improperly colluding with the aforementioned company to which he wants Akzo sold, PPG Industries. So you might be surprised that the company has all of a sudden decided to try to make nice.
Akzo Nobel vowed to “strengthen and maintain a constructive dialogue” with shareholders and create a board committee for relations that will be advised by JP Morgan Cazenove Ltd….
Burgmans, who has born the brunt of opposition from Elliott to the company’s strategy, announced Tuesday he plans to retire in April.
You will probably be less surprised to learn that this change of heart was not exactly spontaneous.
Even stripping out €20 million ($23.3 million) of costs for the company’s takeover defense—PPG walked away from its $28 billion bid in early June—Akzo Nobel’s second-quarter operating profit was 6% lower than last year and 7% lower than analysts had expected. Sales volumes were flat, after 4% growth in the first quarter.
You’ll probably be least surprise to learn that the ploy hasn’t exactly worked.
“Shareholders are not easily fooled, neither by blatant circumvention of the law nor by empty claims of active shareholder outreach,” Elliott said. The fund has maintained pressure on Akzo Nobel since PPG walked away from its approach June 1. It’s making a second attempt in court on Thursday to oust Burgmans.
Elliott Blasts Akzo Nobel Over Paintmaker’s Shareholder Meeting [Bloomberg]
Akzo Nobel’s Poor Results Increase Chances of a Deal [WSJ]
Paul Singer ‘urgently’ wants info on Dutch paint giant’s CEO [N.Y. Post]