[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Monday, 18 June 2007, 16:15 GMT 17:15 UK
ICI rejects 7.2bn bid approach
Dulux paint

UK paint and chemicals giant ICI has rejected a 7.2bn bid approach from its Dutch rival, Akzo Nobel.

Dulux maker ICI said that the 600 pence-per-share offer from Akzo, producer of Crown Paint, was too low.

Akzo said that there was no guarantee of a higher offer for the UK firm, but the prospect of an increased bid sent ICI shares up by more than 15%.

"Akzo Nobel will continue to evaluate all strategic opportunities, including ICI," the Dutch firm said.

It added that a merger would "represent a highly attractive addition to its focused coatings and chemicals business".

Shares in ICI jumped 15.5% to close at 634.5p in London trading.


ICI, which was established in 1926 and employs around 4,000 people in the UK, said it was "very confident in the group's strategy and strong growth prospects," the chemicals giant said.

BBC business editor Robert Peston
Barring a stock market meltdown, ICI will be swallowed whole and soon
Robert Peston,
BBC business editor

Shares in ICI have soared over the past year on rife speculation that it would be a takeover target, particularly after last year's disposal of its flavours and fragrance operation Quest.

Other possible suitors include US firm Dow Chemicals and India's Reliance Industries, according to analysts, who say that an offer of 650p a share would be more acceptable to ICI.

At its peak, the firm was an industrial powerhouse in the UK with interests in pharmaceuticals, food additives and dyes, but since the 1990s it has suffered cost pressures and struggled to refocus the business on paints and specialty chemicals.

ICI warns of rising cost pressure
05 May 05 |  Business
ICI price warning as profits rise
29 Jul 04 |  Business
ICI looks for growth by 2007
30 Oct 03 |  Business

The BBC is not responsible for the content of external internet sites

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Americas Africa Europe Middle East South Asia Asia Pacific