Britain's Imperial Chemical Industries (ICI) has rejected a £7.2 billion sterling bid approach from Dutch chemicals group Akzo Nobel NV.
Shares in ICI, which makes Dulux paints, jumped as much as 17.3 per cent to an eight-year high of 644 pence today, after news it had rejected the 600 pence-a-share bid proposal, saying it undervalued the company.
Akzo, the world's largest maker of industrial coatings, fell 1.8 per cent to €60.48, as Rabo Securities analysts said a bid of 600 pence a share or above would be value-destroying for its shareholders.
ICI, Britain's biggest chemicals company, has long been tipped as a bid target after slimming down to focus on high-margin paints and adhesives, and speculation Akzo would make a bid rose after the Dutch group sold its drugs unit in March for €11 billion ($14.7 billion).
Buying ICI, which makes 27 per cent of its sales in Asia, would give Akzo a bigger share of fast-growing emerging markets and help it fix its underperforming European decorative business, with minimal antitrust issues, analysts said.