AkzoNobel under attack from largest shareholder

A package of measures introduced by AkzoNobel to diffuse tension with its largest shareholder, the hedge fund firm Elliott Advisors, appears to have fallen short.

The package includes the formation of a supervisory board committee for shareholder relations, the appointment of a shareholder relations adviser from investment bank J.P. Morgan Cazenove, and the promise of more opportunity for analysts and investors to meet with senior management.

But rather than ease up, Elliott is pushing for its legal right to introduce a motion at AkzoNobel’s extraordinary general meeting on Sept. 8 so that it can vote for the dismissal of AkzoNobel Chair Antony Burgmans.

Elliott is critical of Burgmans for resisting a takeover by U.S. paints rival PPG Industries earlier this year. In recent days, Elliott also criticized AkzoNobel for failing to communicate its strategy after the unexpected resignation of CEO Ton Büchner on July 18.

And Elliott is unhappy with AkzoNobel’s nomination of Thierry Vanlancker—the firm’s former head of chemicals—as its CEO following Büchner’s exit. “The current status of the nominated CEO is untenable and raises significant legal and reputational risks for the company,” Elliott says.

Elliott says it has yet to get answers from AkzoNobel on whether the Dutch company will continue its previously announced strategy to separate its chemicals business by mid-2018; on whether the firm will reaffirm its 2020 financial targets, which it says “are not considered credible by the market;” and on the steps Vanlancker will take to close what Elliott perceives to be a $5.8 billion gap between AkzoNobel’s current market capitalization and PPG’s $28.8 billion takeover offer on May 8.

Elliott says answers to these questions will be crucial for shareholders when they decide if they will support the nomination of Vanlancker at AkzoNobel’s extraordinary general meeting.

Meanwhile, after Vanlancker’s nominated promotion to CEO, AkzoNobel has chosen Werner Fuhrmann to head up its chemical business. Fuhrmann previously headed the chemical business but announced his retirement last year when Vanlancker took over the chemical job.