By Thomas Escritt and Toby Sterling
AMSTERDAM (Reuters) - Shareholders piled pressure on Dutch paint maker Akzo Nobel <AKZO.AS> to open talks with U.S. rival PPG Industries <PPG.N> on Wednesday after Akzo rejected a revised 22.7 billion euro takeover offer as too low, too risky and a bad fit culturally.
With Akzo insisting that the interests of staff and investors were best served by its plan to spin off its chemicals division and remain independent, the Dutch Shareholders' Association (VEB) said PPG should be given a hearing.
"The second offer addressed many of Akzo's concerns about research and development, jobs and the firms' cultures, so they should at least discuss it," said Paul Koster, VEB's director, echoing the views of several of Akzo's biggest shareholders.
PPG said its offer was worth 90 euros a share -- the level at which one investor said a sale would become attractive.
"At this price we would believe it is up to management to convince us not to sell," one top-20 shareholder told Reuters.
Pittsburgh-based PPG's pursuit of Akzo has raised hackles at the paints and coatings maker, which, like many Dutch companies, is ringed with defenses designed to make hostile takeovers difficult.
"This is not solely about price," CEO Ton Buechner said in an interview with Reuters, saying that the leverage the combined companies would carry after a merger and "execution risks" also played a role in rejecting the offer.
"This unsolicited proposal simply doesn't warrant Akzo Nobel engagement with PPG."
In a statement rejecting the proposal, Akzo also cited "a significant culture gap between both companies."
Dutch politicians have come out against a takeover of Akzo, including Economic Affairs Minister Henk Kamp, who said it would not in the Netherlands' national interest.
"LET'S TALK IT OVER"
PPG's initial offer of 83 euros per share on March 9 valued the company at 21 billion euros.
In a nod to the political sensitivity of any deal, PPG said its cash and share offer would reflect the interests of "shareholders, employees, customers and the communities" served by Akzo and that regulatory approval could be obtained.
It said its offer was based on achieving annual synergies of at least $750 million.
PPG urged Akzo to negotiate, adding the latest bid offered a 40 percent premium compared to the price before the first approach was announced.
"We believe the revised proposal presents an opportunity for Akzo Nobel's shareholders to realize extraordinary value, by any measure, for their shares in Akzo Nobel," said PPG Chairman and CEO Michael McGarry.
McGarry is traveling to the Netherlands to rally support. Buechner, asked whether he would be willing to meet with his American counterpart, repeated that PPG's proposal does not "warrant engagement".
Elliott Advisors, which holds a stake of more than 3 percent in Akzo, urged the company to open talks.
"Elliott is disappointed by Akzo Nobel's conduct in relation to PPG's bids, and concerned that Akzo Nobel appears to be ignoring the will of shareholders which seem to strongly support engagement with PPG," it said in a statement.
Longtime Akzo shareholder Columbia Threadneedle also said a takeover made sense and the companies boards should engage in talks.
Asked to name a shareholder who supports Akzo's plans to spin off its chemicals division rather than entertain talks with PPG, Buechner said he could not comment on individual shareholders.
"We've spoken with many stakeholders, we've reached out to a large number of shareholders that are very important to us, we've even stepped into planes and we've traveled to them," he said.
Shares in the Dutch company, known for Dulux paint and advanced coatings that make submarines go faster, closed 1.1 percent lower at 75.78 euros.
Minster Kamp's statement follows rising public opposition to foreign takeovers of Dutch companies, also visible after Kraft's failed bid for totemic Anglo-Dutch consumer giant Unilever.
However, Koster of the shareholders union VEB said Dutch companies could not shut themselves away from the impact of open markets.
"I think we have to recognize we are an open economy dependent on exports. Dutch companies have also made a lot of takeovers in other countries," he said.
The Nobel in Akzo's name comes from Sweden's Nobel Industries, acquired in 1993, and the bulk of its coatings business was acquired from Britain's ICI in 2008.
Despite the "cultural gap" between the companies, PPG is a major employer in the Netherlands, and Akzo sold its own U.S. decorative paint-making operations to PPG in 2012.
Some analysts said that PPG needed to work harder to win over all the parties, not just investors.
"Throwing money or getting an activist involved - that is trying to force the issue," said Ben Gomes-Casseres, a management professor at Brandeis University in Massachusetts.
"They need to probably change their approach - that's the bottom line. You can't buy love."
(Additional reporting by Anthony Deutsch and Simon Jessop; Editing by Keith Weir/David Evans)