AMSTERDAM (REUTERS) - The resignation of Akzo Nobel's chief executive officer poses a dilemma for the Dutch paintmaker as a shareholders' meeting to approve his replacement could open the way for a vote on chairman Antony Burgmans, who is under pressure for rejecting a takeover bid.
Mr Thierry Vanlancker was named new CEO on Wednesday (July 19) after his predecessor Ton Buechner quit abruptly for health reasons. Mr Buechner's departure puts the onus on Mr Vanlancker to deliver the higher sales and margins promised when Akzo Nobel fended off a €26.3 billion (S$41.88 billion) bid by rival PPG Industries in the United States.
Shareholders must eventually approve Mr Vanlancker as CEO. But a meeting could give disgruntled shareholders an opportunity to push for a vote on the position of Mr Burgmans - which they have been demanding for months.
Hedge fund Elliott Advisors, now Akzo's largest shareholder with a 9.5 per cent stake, filed a lawsuit in May seeking the ousting of Mr Burgmans, whom the hedge fund sees as the mastermind of Akzo's refusal to talk to PPG, which dropped its attempt on June 1.
In a preliminary ruling, Elliott's request was rejected, though its legal efforts to remove Mr Burgmans continued. Faced with shareholder discontent, Akzo has yet to decide when it will ask shareholders to approve Mr Vanlancker as new CEO.
"We will go through the shareholder approval process in due course," Akzo Nobel spokesman Leslie McGibbon said on Friday (July 21).
Mr Vanlancker, 52, joined Akzo last year and officially took up his position as head of Akzo's specialty chemicals division only in February, raising a technical problem: He is not yet a formal member of the management board. "But that doesn't mean that he is not authorised (to take major decisions)," Mr McGibbon said. "In case a board member falls away, the supervisory board can appoint a temporary replacement... Together with CFO (Chief Financial Officer) Maelys Castella, he can take any decision."
Mr Burgmans' third term as a member of the supervisory board ends next year. It is unclear whether he might attempt to stay longer. Mr McGibbon said he could not comment further but the company expects Mr Vanlancker to field a wide range of questions when the company presents second-quarter earnings on July 25.
Akzo rivals PPG and Sherwin-Williams have both reported lacklustre earnings for the quarter. PPG announced an acquisition on Thursday and CEO Michael McGarry told reporters that Akzo Nobel is now in the company's "rear-view mirror".
Under Dutch market law, PPG cannot reapproach Akzo during a six-month cool-down period that ends in December.
Akzo shares were down 2.3 per cent on Friday at €75.99.