Share Appians news
Akzo Nobel: Takeover Offer Arrives a Month after Appian Purchase
Akzo Nobel is a classic example of a stock that successfully met all the Appian criteria. Below is a summary of the initial investment thesis.
- A sustainable yield of 2.8%, supported by strong free cash flow generation (Free Cash Flow Yield of 6.4%) and a strong balance sheet (Net Debt to EBITDA of 0.3)
- The valuation opportunity was a 30-45% discount to its closest peers.
- Leading market shares in decorative paints (brands such as Dulux and Crown) and performance coatings provided an opportunity for a higher level of profitability and better returns.
- A new CEO proved to be the catalyst. Ton Bucher arrived in 2012 and set in place a strategy of making the business more efficient and reducing debt. These moves have been successful and provided the company with a platform to pursue growth.
- Akzo Nobel management have rejected the current offer, stating that the it “substantially under-values” the company. They have also announced plans to spin off its chemical business and focus purely on decorative paints and coatings. This move may not be enough to see off another bid and one could emerge in the foreseeable future.
- Akzo Nobel Purchased for Appian Equity Fund and Appian Value Fund.
Appian Asset Management Limited is regulated by the Central Bank of Ireland. No part of this document is to be reproduced without our written permission. This document has been prepared and issued by Appian Asset Management Limited on the basis of publicly available information, internally developed data and other sources believed to be reliable. It does not constitute an offer or an invitation to invest, or the provision of investment advice. No party should treat any of the contents herein as advice in relation to any investment. While all reasonable care has been given to the preparation of the information, no warranties or representation express or implied are given or liability accepted by Appian Asset Management or its affiliates or any directors or employees in relation to the accuracy fairness or completeness of the information contained herein. Any opinion expressed (including estimates and forecasts) may be subject to change without notice.
The ASCOF is a sub-fund of the Appian Unit Trust (Prospectus available on request). The value of investments can fall as well as rise. Past Performance is not a reliable guide to future performance. If you invest in the Appian Unit Trust you may lose some or all of the money you invest.