Pressure has been increased by an activist investor on Dulux paint owner Akzo Nobel by calling for the chairman of the company to be axed.
Elliot Investors has called for the removal of Antony Burgmans following the refusal of the Dutch firm to enter into negotiations with PPG Industries a rival U.S. paint maker related to a takeover bid of $24 billion.
Akzo rejected a pair of offers handed in by PPG, but a number of shareholders, including Elliott are in favor of the bid.
Burgmans and CEO Ton Buechner said the bids undervalue Akzo. However, Elliott said it and a group of other investors meets the legal threshold in Dutch law of 10% support that is needed to call for an extraordinary meeting for a vote on removing Burgmans from his role as chairman.
That process usually takes as long as two months.
A spokesperson for Akzo said the business strongly supports its chairman, but would respond as required by Dutch law within 14 days to the request made by the group led by Elliott.
Removing Burgmans would be damaging, disproportionate, irresponsible and not in the company’s best interest, or its shareholders or other stakeholders, said the spokesperson.
At the same time, the company reported PPG and Elliott to the Dutch regulators for the possible sharing of potential sensitive information between them regarding support for the calling of an extraordinary meeting.
It is not clear the rules, if any, that PPG and shareholders may have violated.
The activist investor, which holds a stake of 3.25% in Akzo, has said it would be responding to the allegations made by Akzo soon. However, PPG was not reached to make a comment.
Elliott, which took a stake in Akzo this past December, is known for making aggressive moves.
Elliott was founded by Paul Singer an activist investor from the U.S. in 1977. It entered the spotlight by investing in the national debt of countries like Peru.
The company is famous for a long battle it had over Argentine debt that climaxed when the company seized a naval ship of Argentina that was docked in the Africa nation of Ghana.
The company is pushing BHP Billiton the mining giant to go through reorganization and then spin off its oil unit in the U.S.
The offer by PPG that was rejected by Akzo on March 22 was worth over €24 billion. Shares of Akzo were flat on Wednesday in Amsterdam.