Akzo Nobel shareholders angered by the Dutch paint maker's rejection of a 26.3 billion euro ($29.5 billion) takeover offer from U.S. rival PPG Industries go to court yesterday seeking a pivotal victory in the continuing battle.
British hedge fund Elliott Advisors, with support from several long-term institutional investors, will try to convince judges at the Amsterdam Enterprise Chamber to order an investigation into possible mismanagement by Akzo's board and force an extraordinary meeting of shareholders to vote on dismissing Chairman Antony Burgmans.
A ruling is expected within a week, soon enough for PPG to decide whether it wants to submit a formal bid to Dutch regulators without the support of the company's board on June 1 or walk away for at least six months. Both sides face difficulties, however.
Dutch lawyers say it will be tough for the shareholders to convince judges that Akzo's corporate governance has been so poor as to warrant an investigation. Akzo, meanwhile, faces a potentially awkward public questioning of its reasons for rejecting PPG's offer on May 8. Akzo has argued that the takeover would be bad for employees, that the companies' cultures don't mesh, that the deal faces antitrust risks, that the merger would be bad for the environment and that Akzo should remain Dutch in the country's national interest.