The battle for control of Akzo Nobel NV escalated after activist shareholder Elliott Advisors called for the chairman’s ouster, drawing a fiery retort from the Dutch paintmaker that has so far resisted calls to engage with PPG Industries Inc. on its $24 billion offer.

The removal of Chairman Antony Burgmans would be irresponsible and damaging, Akzo Nobel said in a statement Wednesday in response to Elliott’s request for an extraordinary general meeting to vote on the change. The Amsterdam-based company also turned to the Dutch regulator after obtaining information suggesting Elliott intended to share price-sensitive information about the demand with PPG ahead of time.

After weeks of posturing by both sides, Elliott is ramping up pressure on Chief Executive Officer Ton Buechner, a week before he’s scheduled to present his own break-up plans to investors to garner support for staying independent. Elliott is fully aware of its regulatory obligations and, as one of Akzo Nobel’s top 20 shareholders, met and communicated with PPG as a matter of course, it said Wednesday.

“Akzo Nobel is sending a signal that it will use all means to avert the takeover,” Theodoor Gilissen analyst Joost van Beek said by phone. “If you want to make someone mad, the way to do it is to say publicly you’ve informed the Dutch regulator, instead of doing it quietly. It’s logical PPG and Elliott are moving in the same direction, but the question is whether they are working together.”

Pressure

Akzo has twice rejected the advances of its Pittsburgh-based rival, saying the latest proposal is too low and not worthy of negotiations. The resistance has come amid pressure from some investors to enter into talks, and the CEO repeated calls to shareholders who may be tempted by PPG’s sweetened offer to wait until the unveiling of his own growth strategy on April 19. Buechner has said he’s been in touch with investors to pitch his plans since PPG first made its approach last month.

Buechner’s vision is centered on the separation of a chemicals division, worth an estimated 9 billion euros ($9.6 billion). Analysts, who will gather in London next week for his presentation, also expect a raft of announcements on new savings and financial targets to compete with PPG’s advances.

The maker of Dulux paint and chlorine said it became aware on April 11 that Elliott intended to privately share potentially price sensitive information with PPG regarding its demand for the shareholders’ meeting. The regulator said it doesn’t comment on specific cases.

Elliott said it and affiliates hold a stake in Akzo Nobel of more than 3 percent, and it’s backed in calling for an EGM by investors holding more than 10 percent. The New York-based fund submitted the request on April 10.

Shares of Akzo Nobel added 0.5 percent to 79.48 euros as of 11:20 a.m. in Amsterdam, compared with PPG’s cash-and-stock offer valued at 88.72 euros.

Source: Bloomberg