AMSTERDAM (Reuters) - The resignation of Akzo Nobel’s (AKZO.AS) CEO 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.
Thierry Vanlancker was named new chief executive on Wednesday after his predecessor Ton Buechner quit abruptly for health reasons.
Buechner’s departure puts the onus on Vanlancker to deliver the higher sales and margins promised when Akzo Nobel fended off
a 26.3 billion euro ($30.62 billion) bid by U.S. rival PPG Industries (PPG.N)..
Shareholders must eventually approve Vanlancker as CEO. But a meeting could give disgruntled shareholders an opportunity to push for a vote on the position of Burgmans — which they have been demanding for months.
Hedge fund Elliott Advisors, now Akzo’s largest shareholder with a 9.5 percent stake, filed a lawsuit in May seeking the ousting of Burgmans, who 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 Burgmans continue. [nL8N1JY1FN}
Faced with the shareholders discontent, Akzo has yet to decide when it will ask shareholders to approve Vanlancker as new CEO.
“We will go through the shareholder approval process in due course,” Akzo Nobel spokesman Leslie McGibbon said on Friday.
Vanlancker, 52, joined Akzo last year and only officially took up his position as head of Akzo’s specialty chemicals division 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 authorized” to take major decisions, McGibbon said. “In case a board member falls away, the supervisory board can appoint a temporary replacement ... Together with CFO Maelys Castella he can take any decision.”
Burgmans’ third term as a member of the supervisory board ends next year. It is unclear whether he might attempt to stay longer.
McGibbon said he could not comment further but the company expects Vanlancker to field a wide range of questions when the company presents second-quarter earnings on July 25.
Akzo rivals PPG and Sherwin-Williams (SHW.N) have both reported lackluster 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 re-approach Akzo during a six-month cooldown period that ends in December.
Akzo shares were down 2.3 percent on Friday at 75.99 euro.
($1 = 0.8590 euros)
Reporting by Bart Meijer; Editing by Adrian Croft