UPDATE: Akzo told to 'put up or shut up' on ICI bid

06 July 2007 16:42  [Source: ICIS news]

By Lucy Craymer and Mark Watts

 

LONDON (ICIS news)--Akzo Nobel is likely to make another bid to acquire UK coatings firm ICI before its deadline next month and could up its offer to 650p/share, a London chemicals analyst said on Friday.

 

Following a request from ICI, the UK Takeover Panel issued a “put up or shut up” order against the Dutch specialty company to follow up last month’s 600p/share takeover bid.

 

“I should think Akzo Nobel will make an offer of around 650p per share, which ICI would look at very seriously,” said chemicals analyst at Brewin Dolphin, Charles Bailey.

 

The Takeover Panel had said Akzo Nobel must decide on whether to proceed with its offer before 9 August or be restricted from making a further one, or even indicating it would make another offer, for six months.

 

On 4 June, Akzo Nobel made an unsuccessful takeover bid for its UK-based coatings rival – the offer was at 600p per share and valued the company at £7.2bn (€10.6bn/$14.5bn).

 

ICI said the bid, which was announced on 18 June, "significantly" undervalued the company.

 

“Akzo Nobel certainly shows the strongest synergies with ICI compared with other potential predators,” said Bailey.

 

He added that ICI had undergone a magnificent turnaround and was now almost seen in the industry as being "there for the taking".

 

KBC Securities analyst Wim Hoste said the acquisition remained strategically a good move for Akzo Nobel, adding that 600p was not necessarily the highest price it would be willing to bid.

 

He added that a takeover of such large scale could trigger a wave of consolidation in the paints and coatings industries – a positive development in the European market.

 

A successful bid from Akzo Nobel might be expected to prompt an anti-trust investigation in the UK into the position of ICI’s Dulux and Akzo Nobel’s Crown paint brands, despite the European coatings market being relatively fragmented.

 

Both ICI and Akzo Nobel have refused to comment on the situation since the Takeover Panel’s ruling.

 

ICI’s share price at 15:47 UK time was 614p, down 1% from Thursday’s close.

 

Prices have risen 40% over the past six months on persistent takeover speculation.

 

(£1 = €1.48/$2.01)

 

By: Mark Watts
+44 20 8652 3214

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