The leading supplier of high-quality yacht paints, Akzo Nobel, is struggling to fend off a €22.4bn takeover from PPG, the US paints, coatings and fibreglass group. Akzo Nobel is the world’s leading supplier of yacht paints through such brands as Awlgrip and International Paints.

PPG has made two attempts since March to make a bid for the Dutch paint group but both times they were rejected out of hand by Akzo Nobel. This resulted in pressure from a number of shareholders including the US activist hedge fund company Elliot Management to try and encourage talks to be held between the two companies.

In its latest attempt to see off the takeover, the Dutch company offered a €1.6bn dividend pay-out deal that shareholders would receive in November.  This has led to more pressure from Elliott and a number of shareholders for talks to be held. Both of Akzo Nobel’s rejections of PPG’s advances have centred on the bid offers under valuing the company.

What Akzo Nobel actually offered was to distribute €1bn by means of a one-off special dividend plus an increase in its regular pay-out by 50%. This would collectively equate to a cash return of €1.6bn. Furthermore, it committed to completing a planned break-up of the group within a year by separating its paints and coating divisions from its speciality chemicals business. This split would generate savings of around €150m. To complete its package of shareholder goodies, Akzo Nobel said it would also improve its medium-term profit targets.

For Elliott and the other challenging shareholders this was not enough calling the offer ‘incomplete’. They also renewed their threat to channel a motion through Dutch courts to have the chairman of Akzo Nobel removed.