Dulux owner reports 'record performance'

Dulux paint-owner AkzoNobel has reported a "record performance" for its first quarter as it continues to resist a hostile takeover attempt by a US rival.

Earnings before income tax climbed 13% year-on-year to 376m euros (£314m), while sales were up 7% at 3.7bn euros.

The Dutch firm also announced plans to spin off its chemicals unit and return most of the proceeds to shareholders.

US paint maker PPG has offered to pay more than $24bn (£19bn) for the firm.

In an open letter on Monday, it urged Akzo's board to enter talks, saying they had given insufficient consideration to its proposal, which is favoured by some AkzoNobel shareholders.

It said Akzo's plan to sell its chemicals arm and remain independent was riskier and would create less value.

But on Wednesday, AkzoNobel said its plan to split itself into two units - one focused on paints and the other on specialty chemicals - would boost growth.

It said the separation, which would also achieve 50m euros of cost savings, would be completed within 12 months.

AkzoNobel boss Ton Buechner said: "Now is the right time to create two focused, high-performing businesses.

"This strategy will create substantial value for shareholders, with significantly less risks and uncertainties compared to alternatives."

The firm said its earnings before income tax in 2017 were expected to be about 100m euros higher than in 2016.

It is also planning a further 150m euros of cost savings, but did not say whether this would lead to job losses. The firm employs 46,000 people globally.

PPG, whose takeover proposals have twice been rejected by Akzo, has said a merger could result in synergies worth at least $750m.