AKZA Akzo Nobel NV

By Christopher Alessi and Austen Hufford 

Paints giant PPG Industries Inc. on Monday again raised its offer for Dutch rival Akzo Nobel NV, the U.S. firm's third takeover attempt in a two-month long, unsolicited courtship.

PPG increased its offer price for Akzo to EUR96.75 ($105.07) a share, up from its bid last month of EUR88.72 a share, valuing the proposed transaction at roughly EUR24.6 billion. PPG's initial approach at the start of March was at EUR83 a share.

Akzo confirmed in a statement Monday it had received PPG's updated offer and would "carefully review and consider" the proposal.

Pittsburgh-based PPG said the new bid values Akzo at a premium of 24% over its closing price of EUR78.20 a share on April 21, the last full day of trading before the revised offer.

That was just days after Akzo unveiled the details of a new strategy to separate its specialty chemicals unit, which is part of Chief Executive Ton Büchner's ongoing effort to ward off PPG.

Mr. Büchner has repeatedly refused to engage with PPG, calling the first two takeover offers inadequate.

The company told investors on April 19 that it plans to pursue a dual-track process to have the option to either spin off the specialty chemicals business as a separate listed entity or sell it outright, to be completed within the next 12 months.

Akzo's stock was up almost 5% on Monday.

The Dutch firm first announced last month that it planned to separate the chemicals business, when it disclosed PPG's interest.

Mr. Büchner said the "vast majority" of net proceeds from the separation of the chemicals business would be returned to shareholders. Pretax proceeds from the move could be roughly EUR8 billion, according to analysts.

Akzo said it is targeting increased shareholder returns and plans to issue a EUR1 billion special dividend to shareholders in November, with a 50% increase on the regular dividend to EUR2.5 a share.

PPG's latest offer comes as Akzo is warding of an effort by some of its largest investors, including activist investor Elliott Management Corp., to push the Amsterdam-based company to engage in negotiations with PPG.

Elliott earlier this month called for a special meeting of Akzo's shareholders to try to oust the chairman of the supervisory board. Akzo responded by saying it strongly supported Chairman Antony Burgmans and would reject an agenda item seeking to dismiss him.

The company hasn't yet said whether it would agree to hold the extraordinary meeting.

Speaking with The Wall Street Journal last week, Mr. Büchner said that unlike PPG's takeover proposal, his plan to separate the specialty chemicals division and create value for shareholders offers a "certainty of execution."

PPG said Monday that its most recent proposal "is vastly superior to Akzo Nobel's new stand-alone plan."

The latest offer appeared to address some of Akzo's concerns over how a takeover could impact its stakeholders, including commitments to maintain Dutch jobs and a promise not to relocate any of the Dutch firm's European Union production facilities to the U.S.

"We think the revised offer will be very difficult for Akzo to reject," analysts at Bernstein Bank wrote Monday. "We think the most likely outcome is that Akzo grants PPG due diligence to enable a slightly improved offer," they said.

Write to Christopher Alessi at christopher.alessi@wsj.com and Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

April 24, 2017 08:36 ET (12:36 GMT)

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