PPG Industries ups bid for Akzo Nobel to $28.8B

PPG has turned up the heat on the Dulux paint maker Akzo Nobel with a third takeover offer and an apparent threat that this would be the last friendly approach. It previously offered to buy Akzo Nobel for $22 billion, but the bid was rejected.

In what has already been a tetchy stand-off between the companies Mike McGarry, the PPG chief executive, said that the offer was "one last invitation" to enter talks.

He added: "Our revised proposal represents a second increase in price along with significant and highly-specific commitments that we are confident AkzoNobel's stakeholders will find compelling".

PPG has said a merger could result in savings worth at least $750m. He also said that any deal between the two firms risked being derailed by regulatory bodies and could lead to job cuts.

It also vowed to keep the headquarters for the marine and protective coatings business, and the decorative coatings and speciality materials arm, in the United Kingdom and the Netherlands respectively.

Akzo confirmed it had received a "third unsolicited proposal" from PPG but was non-committal in its response.

'In accordance with its fiduciary duties and acting under the Dutch governance code the Board of Management and Supervisory Board of Akzo Nobel will carefully review and consider this proposal'.

"Under the new structure, the company will either list the Specialty Chemicals unit as a separate entity or sell it and focus on Paints & Coatings business with "fit-for-purpose" structure and processes".

Akzo Nobel, which bought ICI in 2008, employs 3,500 staff while PPG has 10 manufacturing and RD sites.

The "revised proposal offers a value to AkzoNobel's shareholders that is well in excess of AkzoNobel's ability or track record to create value on a standalone basis", he argued.

Reps from Elliott did not immediately respond to requests to comment.

AkzoNobel reported the investment company to the Dutch Authority for the Financial Markets (AFM) and told Elliott to outline its relationship with PPG Industries. PPG said it represented a 24 per cent premium on Akzo's closing share price last week, €78.20. "PPG has threatened a hostile bid if this does not elicit a negotiation".