A COATINGS maker behind £10.7m North-East expansion plans has rejected a renewed takeover offer.

AkzoNobel has rebuffed a second bid from PPG Industries, which runs a plant in Shildon, County Durham.

Bosses said the approach, worth £76.75 per share in cash and shares, undervalued the firm.

PPG, which supplies paints and coatings, said the proposal represented a chance for AkzoNobel shareholders to “realise extraordinary value”.

Activist investor Elliott Advisors, which holds a small stake in AkzoNobel, has also urged the business to open talks, saying it will attempt to oust the firm’s managers if its demands are ignored.

The offer came just days after AkzoNobel unveiled £10.7m plans to bolster operations at a North-East research hub, which it says will secure nearly 300 jobs.

Officials added it will bring together more than 100 scientists, who will operate from the firm’s existing base in Felling, Gateshead, and work on next generation products to protect steel and concrete structures from corrosion, abrasion and fire.

The business, known for its Dulux, Cuprinol, Hammerite and Polyfilla brands, has also spent millions on a new paint making factory in Ashington, Northumberland, which is expected to create an initial 120 direct jobs.

Referring to PPG’s offer, Ton Büchner, AkzoNobel chief executive, said it failed to “reflect the current and future value” of the firm and didn’t “address significant uncertainties and risks” for shareholders and stakeholders.

Mr Büchner added: “This proposal significantly fails to recognise the value of AkzoNobel; we have rejected it unanimously.

“Our boards do not believe it is in the best interest of stakeholders, including our shareholders, customers and employees.

“We are convinced AkzoNobel is best placed to unlock the value within our company ourselves.”

Mr Büchner also warned a tie-up would trigger “significant job cuts” and create uncertainty for thousands of staff across operations around the world.

He added: “We are executing our plan, including the creation of two focused businesses and new cost structure, and believe this gives us a strong platform for continued profitability and longterm value.”

However, PPG, which is headquartered in the US, has stood by its offer.

Michael McGarry, chairman and chief executive, said: “We believe the revised proposal presents an opportunity for AkzoNobel’s shareholders to realize extraordinary value, by any measure, for their shares.

“It provides them with the opportunity to receive substantial and immediate cash consideration.”

PPG’s Shildon base forms part of the business’ aerospace division, which supplies apparatus such as sealants and coatings.