LONDON (BLOOMBERG) - AkzoNobel chief executive officer Ton Buechner resigned unexpectedly for health reasons amid the pressure of battling activist investor Elliott Management and the threat that rival-turned-suitor PPG Industries could return with another takeover attempt later this year.
The Dutch maker of Dulux paint and chlorine moved quickly to appoint speciality chemicals head Thierry Vanlancker as his successor, effective immediately, according to a statement from the Amsterdam-based company on Wednesday. It is a meteoric rise for the former DuPont executive, who joined AkzoNobel only last year after overseeing the spin-off of pigment maker Chemours from the US company.
AkzoNobel shares rose 0.7 per cent to 78.48 euros, valuing the company at 20 billion euros (S$31.4 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 speciality chemicals. Mr Buechner and chairman Antony Burgmans' refusal to engage with PPG over its US$29.5 billion (S$40.3 billion) offer takeover angered some investors, with Elliott taking its push for talks to court in the Netherlands.
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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 is not likely to make a renewed PPG bid any more successful and should not be taken as a sign that AkzoNobel'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 speciality chemicals business, a split that it has said would generate more value for shareholders than a sale to PPG. As well as overseeing the break-up, either via a spin-off or disposal, he will also face Elliott, the US fund which earlier this month filed a second lawsuit in Dutch court aimed at removing Mr Burgmans.
AkzoNobel did not 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 pre-emptive 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.