ICI to outline National Starch value after Akzo bid

20 June 2007 12:09  [Source: ICIS news]

LONDON (ICIS news)--ICI was set to outline the strengths of its National Starch business to analysts in London on Wednesday as speculation mounted as to whether Akzo Nobel would raise its offer for the UK based specialities group.

ICI chief executive, John McAdam and ICI managers will speak to financial analysts in London at 14:30 local time in an event arranged in March to showcase National Starch a producer of specialty starches for food and industrial use.

Akzo Nobel said there was no certainty it would raise its 600p a share offer which the ICI board rejected on Monday. A report in The Times newspaper suggested Akzo Nobel might raise its bid to 620p or 630p.

“There is no guarantee at all that we will make another approach to ICI,” an AkzoNobel spokesman told ICIS news. “There might not be a next step,” he added.

The 600p a share offer values ICI at £7.4bn (€11bn/$14.8bn) and is equivalent to an EBITDA (earnings before interest, deprecation and amortisation) multiple of about 11.5.

Some analysts had suggested that Akzo Nobel’s US shareholder particularly would be difficult to persuade to support an offer multiple of more than 12.

ICI confirmed on Monday that it had received an approach from Akzo Nobel on 4 June but that its board had unanimously rejected it on the grounds that it “significantly undervalues ICI”.

National Starch accounted for 41% of ICI’s 2006 sales compared with the 50% share of the paints business.

It returned a stronger trading margin than paints for the year at 12.0% compared with 10.6% and its businesses grew relatively strongly.

In the largest segment, ICI is number one in starch-based industrial adhesives in Europe and number two in North America.

($1 = €0.74/£0.50)

By: Nigel Davis
+44 20 8652 3214

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