ICI within sight

30 July 2007 By Una Galani Follow @ugalani

The UK paint company may have rejected a raised 650p offer from its Dutch rival, valuing the group at £7.7bn. But it has agreed to talks. That seems sensible. Markets are choppy and ICI is dependent on the US housing market. The window for a big cash deal may be closing.

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The board of UK paint company Imperial Chemicals Industry unanimously rejected a raised indicative offer from its Dutch rival Akzo Nobel, on the grounds that it doesn't reflect the full value of the company. Akzo Nobel increased its offer almost 9% to 650p per share, valuing ICI at nearly £7.7bn.

Akzo says it was able to increase its offer for the group after entering an exclusive agreement with Henkel for the sale of ICI's Adhesives and Electronics Materials business, which would take place in the event of Akzo completing a deal with ICI. The two divisions combined account for 25% of ICI's £4.8bn total sales.

ICI shares were up 7% in early trading at 618p. Akzo shares were up 1.1% at E61.26.

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