By Christopher Alessi
LONDON--Paint and chemicals giant Akzo Nobel NV on Wednesday outlined a new strategy to separate its specialty chemicals division, part of the Dutch firm's efforts to fend off a $24 billion takeover approach from U.S. rival PPG Industries Inc.
Akzo said the separation of its specialty chemicals business from its paints and coatings operation would take place within the next 12 months. The company plans to pursue a dual-track process to have the option to either spin off the business as a separate listed entity or sell it outright.
The plan was initially announced last month when Akzo disclosed PPG's interest. Akzo has since rejected a second, sweetened offer by PPG of EUR88.72 ($94.7) a share, up from an initial bid of EUR83 a share.
Details of the new strategy come as Akzo is warding of an effort by some of its largest investors, including activist investor Elliott Management Corp., to push the Amsterdam-based company to engage in negotiations with Pittsburgh-based PPG.
Akzo Chief Executive Ton Büchner has repeatedly refused to engage with PPG management, calling the takeover offer inadequate.
Akzo on Wednesday also reported financial results for the first quarter and outlined fresh guidance for the current year, saying it expects earnings before interest and taxes to rise by roughly EUR100 million in 2017. That compares with EBIT of EUR1.5 billion last year.
The company said quarterly net profit stayed flat year-over-year, at EUR240 million, even as EBIT climbed by 13% to EUR376 million, due to volume growth and cost discipline.
Quarterly revenue rose 7% to EUR3.67 billion, mainly as a result of higher volumes and acquisitions.
Akzo's management team is set to update investors in more detail on plans for separating the specialty chemicals unit later today.
Write to Christopher Alessi at firstname.lastname@example.org
(END) Dow Jones Newswires
April 19, 2017 03:18 ET (07:18 GMT)
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