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Elliot Files Petition In Dutch Court Against Akzo Nobel NV Chairman For Not Fulfilling Its Duties

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Akzo Nobel has recently turned down a takeover offer from PPG Industries Inc for an amount of EUR 24.6 billion which is equivalent to $27.1 billion. Allegations have been raised by Elliott Management Corp. In a Dutch court which is known as Enterprise Chambers requesting for a shareholder meeting in regards to the sudden dismissal of Antony Burgman from the position of Chairman. Antony Burgman is accused of not fulfilling the fiduciary responsibilities and other corporate governance responsibilities after they rejected the offer from PPG industries Inc.

According to the reports, there have been considerable depth analyses done by the Chief executive officer Ton Buchner, and Mr. Burgman during their meeting with PPG Chief Executive Michael McGarry in Netherlands. The analysis clearly indicates that they still have a chance to revamp their strategies and restructure them to avoid the takeover. The company could increase dividend payout to the shareholders and focus more on their chemical business unit and return the future returns to the shareholders to retain themselves in the market. PPG industries Inc stated that the meeting did not last for more than 90 minutes and both Buchner and Burgman clearly stated that they didn’t have any intentions or authority to negotiate with them on behalf of Akzo Nobel NV.

Akzo has defended itself by stating that they have closely analyzed the offers made by PPG industries Inc and doesn’t understand how it will benefit the company in the long run. Elliott Management Corp. Is one of the major shareholders in the Akzo Nobel NV with 10 percent and predict that Akzo Nobel NV cannot favor their stand-alone strategy. This request for a shareholder’s meeting in the case of Antony Burgman was earlier rejected by the Dutch court.

PPG Industries Inc are analyzing the rejection by an Amsterdam-based company and planning to increase their bid possibly. But earlier during their press conference, they announced that they have no intentions of increasing the bid anymore since they have already changed their bid a couple of times. Another problem for Akzo Nobel would be their complex management structure which makes it difficult for Elliott Management services and PPG Industries Inc to nominate new chairman. Akzo has a restrictive rights kind of environment wherein the rights are restricted to their founding four directors who can nominate a new chairman for the organization.

The directors are in support of such management style since it protects the right of the stakeholders and the workers in the organization.

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