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AMSTERDAM (Reuters) - Paint maker PPG Industries (PPG.N) said on Wednesday it could walk away from its pursuit of Dutch peer Akzo Nobel (AKZO.AS), which has rejected three takeover bids from the U.S. firm.
Reacting to Akzo's rejection of PPG's latest proposal on May 8, PPG repeated that it believed the deal would be in the best interests of both companies.
PPG has significant support among Akzo shareholders. But opposition from its boards, Dutch politicians and many of its Dutch staff present difficulties that PPG will have to weigh before a June 1 deadline to file bidding papers with the Dutch authorities or walk away for at least six months.
"PPG remains willing to meet with Akzo Nobel to engage in meaningful discussions," PPG said in a statement. "But without productive engagement, PPG will assess and decide whether or not to pursue an offer for Akzo Nobel."
Shares in Akzo fell 1.4 percent to 75.95 euros, far below PPG's cash-and-shares takeover proposal, which is worth or 94.39 euros per Akzo share, valuing the Dutch firm at 25.6 billion euros ($27.82 billion) including debt.
Under Dutch takeover rules, PPG must decide by June 1 whether it will submit papers to the Dutch Financial Markets Authority (AFM) showing it has financing in place and is serious about launching a formal takeover bid for Akzo.
Otherwise PPG would have to refrain from making further attempts to pursue Akzo during a six-month cooling off period.
If PPG does file with the AFM, it would still have a final chance to walk away without further costs before launching a formal bid.
Reporting by Toby Sterling; Editing by Edmund Blair