Akzo Shareholder Says PPG Offer Has `Strategic Rationale'

  • Southeastern Concentrated Value says PPG offer was too low
  • ‘Governments or poison pills’ shouldn’t block a sensible deal

PPG Industries Inc.’s bid for competitor Akzo Nobel NV makes strategic sense, even if it was too low, according to one of the Dutch company’s shareholders.

“The PPG offer, while undervaluing the company, has strategic rationale,” said Scott Cobb, managing partner at investment vehicle Southeastern Concentrated Value, in a statement on Friday. “If a deal makes sense for shareholders, it should not be blocked by governments or poison pills.”

Akzo said Thursday that Pittsburgh-based PPG’s 20.9 billion euro ($22.3 billion) bid was too low and wasn’t in the interest of shareholders, customers or employees. With Dutch national elections looming Wednesday and nationalist sentiment on the rise, politicians across the board weighed in against the transaction, saying it would be bad for the country and its economy.

The price valued the Amsterdam-based maker of Dulux paint at 83 euros a share as of the end of last month, a 31 percent premium to Akzo’s closing price on Feb. 28. A spokesman for Akzo said the company didn’t have any additional comment beyond Chief Executive Officer Ton Buechner’s previous statement, which said the offer undervalued the company and contained “serious risks and uncertainties.”

“Our view is that there are a number of companies in Europe where the focus on value creation needs to be prioritized,” Cobb said. “The status quo could leave many companies in Europe at a significant disadvantage to more nimble rivals.”

Henderson Global Investors, which said it’s an active investor in Akzo, wants PPG management to approach Akzo shareholders to help them better asses the merits of the initial proposal, the firm’s head of European equities, John Bennett, also said.

SCV, whose shareholding in Akzo is below the filing limit, was founded in 2015 by Mason Hawkins of Southeastern Asset Management and Egyptian billionaire Nassef Sawiris, and has been involved in investments in Adidas AG, Sika AG and C&C Group Plc, according to the statement.

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