Takeover Panel has given the Dutch chemicals company Akzo Nobel until 9 August
to table a takeover offer for its UK rival ICI Plc, for which it had made a $14.2-billion
takeover proposal on 4 June that ICI had rejected on the grounds that it undervalued
the world''s largest manufacturer of paints and coatings, had offered 600 pence
a share for ICI (See: ICI rejects $14.2
billion cash bid by Akzo Nobel)
there has been no formal contact between Akzo and ICI ever since the rejection,
the UK- financial daily Financial Times reported that some Akzo managers
had been sounding out ICI shareholders about a further offer.
pension fund trustees are set to play a crucial role in any deal and will insist
that whoever takes over ICI provides enough financial support to the pension scheme
to keep its promises to its 71,800 members.
has seen its share price jump 40 per cent in the past six months on persistent
speculation that ICI was a takeover target.
Nobel, which in a surprise move sold Organon BioSciences, its pharmaceuticals
division to Schering-Plough for $14.5 billion in cash in March (See: Akzo
Nobel sells Organon BioSciences to Schering-Plough for €11 billion)
has enough resources to fund the acquisition.
say the strategic logic behind the deal is compelling with significant opportunities
for synergy in purchasing, distribution and corporate overheads. Moreover, ICI
paints would consolidate Akzo''s position in fast growing markets - Asia accounts
for 15 per cent of ICI paint sales and Latin America for 8 per cent.
ICI is strong in Europe and Asia, analysts also caution saying that Akzo would
be acquiring "a second-rate business" in the US.
potential stumbling block for Akzo is its ownership of the UK-based paint manufacturer,
Crown, which has 14 per cent of the UK paint market and the takeover of ICI, which
owns Dulux that has a 40-per cent market share may raise concerns over competition.