Akzo Nobel NV (AKZOY) will hold an extraordinary shareholders meeting in September to deal with its CEO succession plans and articulate the reasons behind its rejection of a $30 billion approach from PPG Industries (PPG - Get Report) .
The meeting follows weaker-than-expected second quarter earnings and renewed pressure from activist shareholder Elliott Advisors (UK), which pressed for a new dialogue Monday after last week's departure of CEO Ton Ton Buchner for health reasons and the announcement that he'll be replaced by the current head of the group's Speciality Chemicals business, Thierry Vanlancker.
"AkzoNobel values its relationship with shareholders and takes its responsibility towards them very seriously. In recent months this relationship, with a particular group of shareholders, has been impacted by events surrounding the Company," said chairman Antony Burgmans, who said he would step down "as planned and in-line with the Dutch corporate governance code" following the completion of his third term in April 2018.
"We have actively reached out to our shareholders to create a plan to strengthen our relationship," Burgmans added. "This has included feedback from 285 meetings and calls with over 200 investors that have been held in the past six months and a shareholder survey conducted in June of investors holding more than 42% of the total shareholding."
Akzo said the meeting will discuss the creation of a Supervisory Board committee for shareholder relations, senior executive remuneration, and a "program of meetings to introduce new CEO."
The Sept. 8 meeting announcement followed the release of the group's second quarter earnings, which showed core profits falling 6% to €461 million and missing analysts' forecasts of €496 million.
The change in leadership and the new focus on shareholder dialogue follows a months-long battle with activist investor Elliott Advisors (UK), the British subsidiary of Elliott Management and owner of a 9.5% stake in Akzo Nobel, which continues to push for the ouster of Burgmans and major changes in its management team.
Elliot asked for the confirmation of an EGM in an open letter Monday and insisted that the Dutch chemicals group "confirm that shareholders will be given the opportunity to add resolutions to the agenda."
"Elliott notes that the current status of the nominated CEO is untenable and raises significant legal and reputational risks for the company," it said. "Any attempts by Akzo Nobel to circumvent the requirements of its constitutive documents (e.g., by delaying the vote on the nominated CEO's appointment; by preventing shareholders from adding items to the EGM agenda, etc.) would exacerbate the crisis of confidence between Akzo Nobel and its shareholders, further impairing the Company's relationship with its shareholders, which the Enterprise Chamber explicitly instructed Akzo Nobel to repair."
AkzoNobel turned away three separate approaches from PPG Industries Inc. (PPG - Get Report) , favoring instead its own strategic review, which it says is a "superior route to growth and long-term value creation." Those plans include splitting the paints and coatings business from its speciality chemicals group within 12 months and returning the majority of sale proceeds to shareholders. PPG dropped its last $29 billion bid in June.
Akzo shares were marked 0.53 lower at €74.90 in the opening hour of trading in Amsterdam Tuesday, trimming their gain to around 16.5% since news of PPG's approach was first revealed in early March.
More of What's Trending on TheStreet: