Dutch paint maker Akzo Nobel NV's supervisory board is scheduled to meet on Tuesday to discuss how to proceed after deeming PPG Industries 's latest $29 billion offer to be insufficient, people familiar with the matter said.
Later, AkzoNobel said PPG's €26.9bn offer was too low and "failed to reflect the true current and future value of the company".
However, some of its biggest shareholders favour a deal. But opposition from its boards, Dutch politicians and many of its Dutch staff present difficulties PPG will have to weigh before a June 1 deadline to bid or walk away for at least six months.
PPG CEO Michael McGarry told the FD earlier that should AkzoNobel turn down PPG's "friendly" offer, the United States company would launch a hostile bid.
The extensive review and the meeting with PPG confirmed to AkzoNobel that its own strategy is better and does not contain the risks and uncertainties inherent in PPG's proposal.
PPG has not yet given a response to the rejection of their third bid.
PPG's latest cash and share offer values Akzo's at around 96.75 per share, a 50 per cent premium to Akzo share traded before PPG's interest became known on 9 March.
The new strategy unveiled last month includes plans to shed its specialist chemicals division and comes after it was buoyed by stronger-than-expected 2017 first quarter profits. It refused to negotiate on the offers, to the annoyance of some shareholders. It hasn't yet said whether it would agree to hold an extraordinary meeting. Support for the routine measure would normally be virtually unanimous, so the outcome could be seen as a sign of shareholder dissatisfaction.
It also said PPG's proposals on, "employees, pensions, location of headquarters, R&D and sustainability - are limited, or describe existing contractual arrangements".
AkzoNobel has revealed that it has declined the proposal of USA counterpart PPG industries to acquire all the outstanding ordinary shares for the third time.
But there is a major barrier: Like many large Dutch companies, Akzo has a "stichting" or foundation that owns "priority shares" giving it the right to appoint management.
But that deal is widely regarded in the Netherlands as a disaster after the government was forced to bail out the bank in 2008, suffering billions of euros in losses.