UK pension fund, Universities Superannuation Scheme, (USS) has called on the Dutch paintmaker AkzoNobel to engage constructively with its US rival PPG which has recently submitted a third bid for the company, AkzoNobel said it will consider the proposal in line with its fiduciary duties and acting under the Dutch governance code.

Daniel Summerfield, Co-Head of Responsible Investment at USS, said: “We believe that this revised offer, with the assurances given, provides a launch-pad for negotiations to commence in earnest.

The proposed significant break fee, in the event that the required antitrust approvals are not forthcoming, is particularly noteworthy and we therefore call upon the board to seize this opportunity and constructively engage with PPG as a matter of urgency.”

The company is currently engaged in a stand off with Elliot Advisors which is a major shareholder. It supports PPG's bid and has attempted to get an emergency general meeting held to vote on the re-election of the chair of the supervisory board Antony Burgmans.

The company said it could reject the request from Elliott Advisers to dismiss the chairman as it did not meet the standards required under Dutch law. AkzoNobel stated: "The request is irresponsible, disproportionate, damaging and not in the best interests of the Company. Given the sole agenda item, there is no legal basis for calling an EGM."

Byron Grote, Deputy Chairman of the Supervisory Board added: “Following a thorough review and careful considering of this request the Supervisory Board reiterates its unanimous support for Mr. Burgmans in his role as Chairman. His unique experience in international business and global transactions is crucial to the Company. He has played an important role in overseeing and supporting management in the transformation of the Company in recent years, contributing to its significantly improved performance.  It is essential that the steady and experienced hand of the Supervisory Board and its Chairman remains focused on the task of steering the company at this crucial time.”

At AkzoNobel's AGM this week USS publicly expressed its concerns that the board appeared not to be taking seriously its fiduciary obligations to shareholders by blocking an Extraordinary General Meeting that was requisitioned by a group of shareholders.

Summerfield said: “The decision to ride roughshod over shareholders’ rights not only undermines the credibility of the board but portrays Dutch governance in a very negative light.

“We took the unusual step at the AGM of making public our concerns. The board and management now need to demonstrate that they are willing and able to fulfil their fiduciary duties to shareholders by evaluating objectively the revised offer by PPG.”

Elliot Advisors said it viewed Akzo Nobel's position rejecting the agenda item as inexplicable. Shareholders had a legal right under Dutch law to put a proposal to dismiss Burgmans onto the EGM agenda, the firm said.  To the extent that Akzo Nobel refuses to put this item onto the EGM agenda, Elliott intends to use its recourse to the Dutch Courts, including the Enterprise Chamber.