AkzoNobel stock dropped 19% Wednesday as Sherwin-Williams and Nippon Paint announced they will end their pursuit of the company after it rejected two all-cash offers, The Wall Street Journal reported yesterday. It was the stock’s largest single-day drop, according to WSJ.
Last month, AkzoNobel rejected the pair’s conditional and non-binding proposal to purchase AkzoNobel in an all-cash offer of €73 ($85) per share, as Trade Only Today reported.
In response to the withdrawn bid, AkzoNobel released a statement saying its boards continue to unanimously recommend a merger with U.S. peer Axalta Coating Systems, a deal announced last year, according to WSJ.
The rejected proposal involved a public takeover offer from Japan’s Nippon and a later split of the group’s assets with Cleveland-based Sherwin-Williams, WSJ said.
AkzoNobel’s boards argued that the offered price “severely undervalued the intrinsic worth and long-term prospects” of the company. They also cited execution risks, warning that a “complex regulatory clearance process and a messy subsequent asset separation between the Japanese and American buyers would paralyze the company’s day-to-day operations,” Yahoo Finance reported.
In its statement, AkzoNobel said it will provide further updates as appropriate.
At press time, the stock had rebounded day-over-day slightly by 3.21%.
