A COATINGS firm’s largest shareholder has urged bosses to start talks after they snubbed a second takeover offer worth £19.5bn.

Causeway Capital, which owns a 6.8 per cent stake in Dulux maker AkzoNobel, wants negotiations to begin with paints firm PPG Industries to “maximise shareholder value”.

The warning comes after Elliott Advisors said it will attempt to oust AkzoNobel management if they go on ignoring the proposal.

However, AkzoNobel officials say PPG’s latest approach, worth £76.75 per share, undervalues the firm, adding it would trigger “significant job cuts”.

But PPG, which runs a factory in Shildon, County Durham, says its proposal represents a chance for shareholders to “realise extraordinary value”.

Writing to AkzoNobel's board, Sarah Ketterer, Causeway Capital's chief executive, said: "As long-term shareholders, we believe combining AkzoNobel and PPG would create a stronger company, and lead to improved prospects for both shareholders and employees."

But, referring to PPG's approach, Ton Büchner, AkzoNobel chief executive, said: “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."

AkzoNobel previously unveiled £10.7m plans to bolster operations at a North-East research hub.

Officials added it will bring together more than 100 scientists at an existing base in Felling, Gateshead, who will work on next generation products to protect steel and concrete structures.

The firm has also spent millions on a Northumberland paint making factory.

Top 20 shareholders Columbia Threadneedle and Henderson are also said to be pressing for talks to begin.