A Dutch court has rejected attempts by a group of AkzoNobel shareholders to force a special meeting to oust the company’s chairman, Antony Burgmans, who is viewed as the main obstacle to a takeover by US coatings giant PPG.

Enterprise Chamber, a commercial court of the Netherlands, ruled late on May 29 that AkzoNobel was not required to hold the special meeting or to include investors in its response to PPG’s bid. However, judge Gijs Makkink said the lack of confidence among a substantial group of shareholders in the company’s strategy was detrimental to the Dutch group and AkzoNobel’s board and management should find a way to normalize relations with them.

Hedge fund Elliott Advisors, which took the case to court, has repeatedly urged AkzoNobel to engage with PPG. Expressing its disappointment at the outcome, Elliott is said to be considering the implications of the judgement for shareholders’ rights in the Netherlands and for its next steps in relation to AkzoNobel.

PPG must now decide whether to walk away from AkzoNobel or go directly to shareholders with a hostile takeover offer. In response to the court ruling, the Pittsburgh-based firm said: “PPG remains willing to meet with AkzoNobel regarding a potential combination of the two companies, but without productive engagement, PPG will assess and decide whether or not to pursue an offer for AkzoNobel.”

The judgement piles on the pressure for PPG, which is facing a Jun. 1 deadline to submit a formal offer to AFM, the Dutch market regulator, although the US firm has asked for an extension. PPG has submitted three offers since March to AkzoNobel, which has rejected them on the basis that they undervalue the business and would likely lead to big job cuts as well as triggering a lengthy review by competition authorities.

“The ruling has reduced the likelihood of a combination with PPG, leaving only a hostile bid as the way going forward,” ING Bank analyst Stijn Demeester told news agency Bloomberg, adding that Akzo Nobel’s anti-takeover defense mechanism would result in “significant risk” for PPG.