AkzoNobel has rejected a third unsolicited takeover offer from USA rival PPG Industries.
The Dutch-based firm said the 26.9bn-euro (£22.8bn) bid undervalued Akzo and showed a "lack of cultural understanding of the brand".
PPG said it was "disappointed" with the rejection of its third proposal, saying the meeting "lasted less than 90 minutes" and Akzo Nobel officials made clear at the outset they would only discuss PPG's offer and not negotiate. But opposition from its boards, Dutch politicians and many of its Dutch staff present difficulties PPG will have to weigh before a June 1 deadline to bid or walk away for at least six months.
AkzoNobel said it rejected the latest offer after "considerable in-depth analysis" including talks with PPG's CEO, Michael McGarry.
In a statement, PPG continued to assert that its offer was "vastly superior" to Akzo's plans.Moreover, it lashed out at Akzo management for not really talking over the deal with PPG.
AkzoNobel's share price was down 2.4 percent at 77.50 euros ($84.82) late Monday morning compared to its previous close, but had edged up by 0.6 percent since the Amsterdam stock exchange opened. The chemicals business, which accounts for about a third of sales and profits, will be sold or floated within 12 months. Such a move exposes the company to the possibility that PPG will take the offer directly to shareholders.
Finally, the deal would create uncertainty for Akzo employees.
The Dutch public shareholding is just 8 per cent in AkzoNobel, while Anglo-American investors hold about 65 per cent, with 48 per cent held by North Americans and 17 per cent held by British.
During voting at the meeting, about a third of shareholders opposed a resolution allowing management to issue shares this year.
Although such a request is allowed under Dutch law, Akzo refused, saying it would not be in the company's best interest.
AkzoNobel has revealed that it has declined the proposal of U.S. counterpart PPG industries to acquire all the outstanding ordinary shares for the third time.
According to PPG spokesman, the company will respond shortly and on the other hand, Elliot Advisors has argued that the job losses would be four times greater as required by Akzo's independence plan than what it would be if PPG and Akzo were to merge.