Rumoured ICI bid tops £8bn

ICI suitor Akzo Nobel is today said to have upped its proposed offer for the Dulux paint maker to just over £8bn (€11.8bn) in its latest attempt to secure the group.

Reports suggest that ICI's Dutch rival Akzo Nobel has indicated that it would be willing to pay 670p a share for the British chemicals group after a 650p a share proposal was snubbed last week for being too low.

An offer at 370p a share would value ICI at around £200m (€296.3m) more than the previous approach, which had already been increased from Akzo's initial £7.2bn (€10.6bn) takeover move made in June.

Talks between the two firms are said to be continuing this week ahead of Akzo's deadline on Thursday, when it must make a firm offer for the group or walk away under Takeover Panel rules.

Major ICI shareholders are reportedly unwilling to consider an offer below 700p for the business, although it is thought that an offer at 670p a share would give Akzo access to ICI's books.

The Dutch firm has been seen as a likely bidder for ICI since it agreed to sell its pharmaceuticals unit Organon BioSciences to Schering-Plough for €11bn in March as part of a plan to focus on paints, adhesives and speciality chemicals.

Two disposals last year also helped cut the company's debts and pension deficit.

Akzo, whose brands including Crown Paints, is keen to add ICI's paints business to its own and plans to sell ICI's adhesives business to German chemicals firm Henkel should the takeover go ahead.

It has struck an exclusivity deal with the German business over the sale and says the tie-up will allow more cash to be returned to shareholders.

ICI, which has around 3,500 staff in the UK, had also be reportedly in the sights of US company Dow Chemicals, although speculation suggests the group is not close to mounting an offer.

ICI has 26,000 staff worldwide, with major UK bases in Slough, Berkshire; Stowmarket, Suffolk; Prudhoe, Northumberland; Birmingham and Hull.

The business last week posted a 12% rise in underlying pre-tax profits to £255m (€377.8m) for the first half of the year,

Akzo Nobel was formed in 1994 through the merger of Dutch firm Akzo with Swedish company Nobel Industries. In 1998 the business bought Essex-based fibres firm Courtaulds.

Neither ICI nor Akzo were available for comment.