Clock ticks while PPG woos paint giant Akzo

REUTERS  Robin van Lonkhuijsen  United

REUTERS Robin van Lonkhuijsen United

AMSTERDAM, May 22 (Reuters) - Akzo Nobel shareholders angered by the Dulux paint maker's rejection of a 26.3 billion euro ($29.5 billion) takeover proposal from USA rival PPG Industries took their fight to an Amsterdam court on Monday.

AkzoNobel, whose best-known brands include Dulux and Trimetal, earlier this month snubbed a third takeover offer by PPG - which valued the company at some 24.6 billion euros ($27 billion).

"PPG remains very interested in pursuing a consensual, privately negotiated, substantive deal with AkzoNobel", PPG CEO Michael McGarry said in Amsterdam on Tuesday.

Elliott Advisers and the other institutional investors together represent 18% of the Dutch paint maker's shares.

De Groot said "the rapid way" in which AkzoNobel's board had refused the request by Elliott and other shareholders for an extraordinary meeting was "unacceptable".

McGarry said that financing of a possible deal "is not an issue".

The Enterprise Chamber will hand down its ruling on Monday, May 29, the presiding judge Gijs Makkink said.

He told the judges that PPG was prepared to pay a 200-million-euro break-up fee should negotiations with AkzoNobel reach a dead-end.

The hearing on Monday is the culmination of weeks of campaigning by Elliott to push Akzo Nobel to enter talks with PPG, a move the fiercely independent Dutch company has rejected with the backing of the Dutch government and labor unions.

The Court is expected to decide on May 29 whether shareholders can hold an extraordinary meeting to vote on removing AkzoNobel chairperson Antony Burgmans, which the company initially rejected, according to Bloomberg.

Akzo's charter gives shareholders the right to dismiss managers and also allows four members of the supervisory board, including Burgmans, to form a "foundation" that has the right to name new managers and other board members when the company faces a hostile takeover. "They always come with strings attached", he said.

If it does not, there is a six-month cooling-off period during which it will not be able to make a new offer.

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