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Akzo Nobel CEO quits due to illness amid activist pressure
[LONDON] Akzo Nobel NV Chief Executive Officer Ton Buechner resigned unexpectedly for health reasons amid the pressure of battling activist investor Elliott Management Corp and the threat that rival-turned-suitor PPG Industries Inc could return with another takeover attempt later this year.
The Dutch maker of Dulux paint and chlorine moved quickly to appoint specialty chemicals head Thierry Vanlancker as his successor, effective immediately, according to a statement from the Amsterdam-based company on Wednesday. It's a meteoric rise for the former DuPont Co executive, who joined Akzo Nobel only last year after overseeing the spinoff of pigment maker Chemours Co from the U.S. company.
Akzo Nobel shares rose 0.7 per cent to 78.48 euros, valuing the company at 20 billion euros (S$31.5 billion).
The clock is ticking for Mr Vanlancker - just as it was for Mr Buechner - as the company pledged to stick to a planned strategy of exiting specialty chemicals. Mr Buechner and Chairman Antony Burgmans's refusal to engage with PPG over its US$29.5 billion offer takeover angered some investors, with Elliott taking its push for talks to court in the Netherlands. Pittsburgh-based PPG pulled its bid on June 1, saying it was in its best interests "at this time." Under Dutch takeover law, it has to wait six months before making another move.
"After rejecting PPG's takeover offer and the ongoing attack of activist investors afterwards, Akzo's management is under massive pressure to deliver value creation," Markus Mayer, an analyst at Baader Bank, wrote in a note. The CEO change isn't likely to make a renewed PPG bid any more successful, and shouldn't be taken as a sign that Akzo Nobel's supervisory board will be any less determined to fend off Elliott as well, he said.
Speaking on a call with reporters, Mr Vanlancker reaffirmed the company's plan to exit the specialty chemicals business, a split that it has said would generate more value for shareholders than a sale to PPG. As well as overseeing the breakup, either via a spinoff or disposal, he will also face Elliott, the US fund which earlier this month filed a second lawsuit in Dutch court aimed at removing Burgmans.
Akzo Nobel didn't disclose the nature of Mr Buechner's decline in health, which Mr Burgmans said on the call came on in the last few days and is unrelated to the company's strategy. Mr Buechner decided to make a preemptive move to stand down to avoid any deterioration, Mr Burgmans said. Mr Buechner has had health problems in the past. He took a leave in September 2012, less than six months after taking the helm, because of fatigue. He returned after about three months.
"For me this was an extraordinarily difficult decision to make but my focus must now be on my health," Mr Buechner said in the statement.