By Bart H. Meijer and Anthony Deutsch
AMSTERDAM (Reuters) - Activist hedge fund Elliott Advisors returned to court on Thursday to try to oust the chairman of Dutch paints group Akzo Nobel (AS:AKZO) over his rejection of a 26.3 billion euro ($30 billion) takeover proposal from PPG Industries (N:PPG).
Elliott, the largest Akzo investor with a 9.5 percent stake, is pursuing the case even after Akzo said on Tuesday that 70-year old Chairman Antony Burgmans would step down when his term expires next April.
That will be too late for Elliott which is engaged in an increasingly bitter fight against Burgmans, who it blamed in court for financial underperformance and causing a "crisis of confidence" among Akzo shareholders.
Akzo and Pittsburgh-based PPG are in a six-month compulsory cooling off period which expires in December.
Elliott lawyer Jan-Willem de Groot said there was widespread shareholder support for their demands.
"Almost the entire top 20 of Akzo shareholders, representing total investments of more than 6 billion euros, have been urging a meeting for months," he said, naming British pension scheme investor USS, Franklin Templeton and Dodge & Cox.
Some analysts believe the departure of the two leading opponents of a deal, after Chief Executive Ton Buechner announced his immediate resignation on July 19 due to health reasons, could open the door for talks.
In a preliminary ruling in May, Amsterdam's Enterprise Chamber rejected Elliott's first bid to compel Akzo to convene an extraordinary meeting of shareholders to vote on dismissing Burgmans, saying it was an attempt to wrest control of the company's strategic direction from the board.
Akzo said Elliott and York Capital Management, which has joined the Dutch lawsuit, were still trying to force the Dulux paintmaker to change course.
"All objections to Burgmans relate to the strategy and decisions regarding PPG," lawyer Harm-Jan de Kluiver said. "But it's already established that Akzo Nobel's boards acted within their rights."
Buechner's sudden departure left his successor, relatively new chemicals division chief Thierry Vanlancker, to deliver higher sales and margins promised when the Dutch paintmaker fended off PPG's takeover attempt.
Akzo's second quarter results, announced on Tuesday, missed expectations. The company's shares traded up 1.1 percent at 76.50 euros on Thursday afternoon, far below PPG's final cash and share proposal of around 95 euros made in April.
Akzo said that shareholders would have their say at an extraordinary meeting on Sept. 8, but Elliott responded furiously, saying Akzo had chosen "yet again to flout fundamental shareholder rights" by not allowing a vote on Burgmans too.
The court will present its ruling on Aug. 10.
If it rules in favor of Elliott and York, Akzo will have to convene another extraordinary shareholders meeting, as it will be too late to add items to the agenda of the Sept. 8 meeting due to regulatory deadlines.