Elliot Advisors, the hedge fund that has been pushing Dutch paint maker Akzo Nobel to enter takeover talks with U.S. peer PPG Industries, said on Tuesday it had launched legal action in an attempt to oust Akzo chairman Antony Burgmans.
In a letter, the fund said Akzo's rejection of PPG's third takeover proposal, worth 26.3 billion euros ($28.73 billion), was "a flagrant breach of Akzo Nobel's Boards' fiduciary duties and of Dutch corporate law, and...an arrogant dismissal of recognized principles of proper corporate governance."
Elliott said it had filed a suit with Amsterdam's Enterprise Chamber petitioning a judge to order an extraordinary meeting of shareholders to debate Burgman's dismissal.
Under Dutch law, shareholders representing a 10 percent stake have the right to ask the company to call an extraordinary meeting. Elliott, with a 3.25 percent stake, had earlier assembled a group of institutional investors meeting the threshold and requested Akzo call such a meeting, but the company declined, saying it supports Burgmans and the EGM would not be in the company's best interests.