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Back For A Second Coat?

10 March 2017 by lberuti

AKZANA ( Akzo Nobel N.V. ) is one of the “boring names” included in iTraxx Main. It hardly moves one way or the other, and when it does, it does so reluctantly in sympathy with the broader, index without attracting much interest. Even if the burst of activity that took place over the last couple of days will not transpire in the volume statistics before April - that is because of DTCC's decision to suspend the free access to weekly data in a timely manner -, it clearly impacted AKZANA’s 5-year risk premium. This rare increase in volumes stemmed from a bid the company received from PPG Industries to acquire it for €83 a share. The unsolicited approach was rebuked by AKZANA’s management who said it substantially undervalued the business. With national elections looming next Wednesday, they also played up the rising nationalist sentiment – a few Dutch politicians weighted in against the transaction -, tweeting a Bloomberg News article about their rejection of the approach with the hashtag #DucthPride. Despite headlines suggesting a potential spin-off of the chemical arm of AKZANA, that should not be enough to prevent PPG to come back with a second offer. Having already pushed AKZANA’s 5-year risk premium 4bps wider yesterday, investors marked it another couple of bps wider at 59bps today.