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Akzo Nobel, the besieged Dutch paintmaker, has rejected a request by the activist investor Elliott for a special shareholder meeting aimed at ousting the company’s chairman, on the grounds it has “no legal basis”.
The hedge fund led a band of shareholders who called for an extraordinary general meeting to remove Antony Burgmans, as part of its campaign to force Akzo Nobel into takeover talks with its larger US rival PPG Industries.
PPG on Monday tabled a third takeover bid for Akzo Nobel worth €26.9bn, saying that the offer was its ‘last’ friendly overture before it would take hostile action. Akzo Nobel had vehemently rejected two prior offers.
Elliott has criticised Akzo Nobel’s approach to corporate governance in its handling of the situation.
On Tuesday, Akzo Nobel noted that while investors representing more than 10 per cent of shares have the right to call a general meeting under Dutch law, this includes “meeting standards of reasonableness and fairness and a ‘legitimate interest’ test.”
The Supervisory Board has concluded that the request from Elliott Advisers to dismiss the Chairman does not meet the standards required under Dutch law. The request is irresponsible, disproportionate, damaging and not in the best interests of the Company. Given the sole agenda item, there is no legal basis for calling an EGM.
Elliott has previously threatened recourse to the Dutch courts if the EGM request were turned down.