PPG raises offer for Akzo Nobel to $29 billion

PPG raises offer for Akzo Nobel to $29 billion

Industries, the USA paintmaker that is pursuing a takeover of Dutch peer Akzo Nobel, on Monday increased its proposed cash and share offer to 26.9 billion euros ($28.8 billion), from around 24.6 billion euros.

The company has come under pressure in recent weeks after already twice rejecting offers in the increasingly hostile takeover battle with the Pittsburg-based PPG.

"We are extending this one last invitation to you and the AkzoNobel boards to reconsider your stance and to engage with us", PPG Chief Executive Michael McGarry said in a statement on Monday.

PPG's latest proposal comes just days after AkzoNobel outlined the details of a plan to carve out its specialty chemicals business within the next 12 months and then consider either selling or listing the new company.

At 1300 BST, the shares were up 4.5% to €81.72.

The shareholders, led by hedge fund Elliott Advisors, say Akzo should at least open exploratory talks with Pittsburg-based PPG. The deal is comprised of cash of €61.50 and 0.357 shares of PPG common stock, values Akzo Nobel at $28.8 billion, PPG said, including the assumption of net debt and minority interests.

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In an attempt to address Akzo concerns over regulation, the latest PPG offer includes a break fee for if the deal is blocked.

"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", Mr. McGarry said.

McGarry said given the support from Akzo Nobel's shareholders for a deal, PPG meant to submit a formal offer for Akzo Nobel shares by June 1, regardless of whether its boards have agreed to talks by that time. The offer is up eight per cent on the previous offer and 17 per cent on the first.

Known for its strong-arm tactics, Elliott, which holds a stake worth more than 3%, said it would attempt to oust AkzoNobel's managers if the company refused to commence talks with PPG.

Professor John Colley, of Warwick Business School, said PPG's new offer has given AkzoNobel little option but to engage.

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