LONDON (Reuters) - British universities pension scheme fund manager USS said on Thursday it planned to withdraw a proposal to nominate Eric Meurice as a supervisory board member of Dutch paints and coatings giant Akzo Nobel (AS:AKZO).
Last week Akzo's supervisory board said it did not support the proposal to appoint Meurice, the former chief executive of Dutch semiconductor equipment maker ASML (AS:ASML). Akzo therefore wanted shareholders to choose between Meurice and its own nominee, German plastics producer Covestro's (DE:1COV) chief executive, Patrick Thomas.
"Asking two extremely strong candidates to compete against each other for a single position, as has regrettably been decided by Akzo Nobel, is not the best way to achieve the strongest board for the company," USS said in a statement.
USS earlier this year sided with other disgruntled shareholders in an unsuccessful public campaign to force Akzo to open negotiations on a 26 billion-euro (£23.17 billion) takeover proposal made by U.S. rival PPG Industries (N:PPG), which had been rejected by management.
Having subsequently won a court case in which activist investor Elliott Advisors sought but failed to get the removal of president Antony Burgmans, Akzo pledged to mend its relationship with shareholders.
The maker of Dulux paints is in the process of spinning off its specialty chemicals division, as promised by management in the process of fending off PPG's advances.
In its fight with PPG, Akzo also promised shareholders better returns, but rising material costs and other "headwinds" have already forced the company to retreat on those pledges for 2017.