PITTSBURGH _ AkzoNobel on Monday rejected PPG's latest acquisition offer, setting the stage for the Pittsburgh coatings giant to possibly launch a hostile takeover bid for its Dutch paints rival.
Top officials of both companies met over the weekend in Rotterdam, but Akzo declined to negotiate PPG's latest offer to buy the company in a deal valued at $29 billion.
Under Dutch law, PPG has until June 1 to submit a hostile takeover bid.
Amsterdam-based Akzo, which makes Dulux and other paint brands, said it was declining PPG's third unsolicited offer because it wants to focus on its own strategy of increasing value for shareholders by spinning out its chemicals business and paying out extra dividends.
PPG said in a statement Monday it was "disappointed" Akzo declined to negotiate and that it was reviewing Akzo's response.
PPG's latest bid for Akzo, submitted April 24, was for 90 euros a share, about 50 percent more than Akzo's stock price before PPG's first offer became public in March.
After Akzo rebuffed PPG's earlier offers, its major shareholders began pressing the company to enter talks with PPG, saying a merger would offer more value than Akzo can achieve on its own.
On Friday, Akzo notified PPG that it would meet with company officials the following day.
Michael McGarry, PPG chairman and chief executive, and Hugh Grant, PPG's lead independent director, met with Antony Burgmans, chairman of Akzo's supervisory board, and Ton Buchner, the company's chief executive and chairman of its board of management.
In a session that lasted less than 90 minutes, PPG said the Akzo officials declined to negotiate PPG's proposal and did not answer questions or discuss their own plan for Akzo's future.
"PPG continues to believe its proposal is vastly superior in shareholder value creation and provides more certainty to employees and pensioners than AkzoNobel's recently announced new standalone plan," PPG said in its statement.
But Akzo held to its earlier assertions that PPG's offer undervalues the company and does not adequately address antitrust concerns and other issues including employee commitments, pensions and potential closings of facilities.
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