ICI frustrated with Akzo Nobel ....... request put-up-or-shut-up order

To continue the story from an earlier blog, the FT has reported that, "ICI has asked that the Takeover Panel issue Akzo Nobel with a “put-up-or-shut-up” order. ICI rejected the £7.2bn (€10.7bn) takeover by Akzo but has had no formal contact with the Dutch company since.

The FT report states that, "ICI’s leading shareholders have said that any offer for the company should be above 700p. But some analysts warned that at that price the deal would destroy value for Akzo. The offer of 600p a share is equal to a multiple of about 11.5 times earnings before interest, tax, depreciation and amortisation. At 700p, this multiple rises to 12.5 times. Recent deals in the sector have been at similar, if not higher, levels."

The FT report goes on to state that, "A second approach could trigger competing bids from rivals including BASF, DuPont and Dow Chemical, and possibly from private equity. Akzo has repeatedly said it would not overpay for ICI. The company is sitting on a large cash pile after it sold its pharmaceuticals business to Schering-Plough, the US drugs group, for £11bn in cash in March.

Shares in ICI have risen more than 40 per cent in the past six months on takeover speculation. Some analysts say the antitrust issues, as well as ICI’s large pension, deficit would be a hurdle for any takeover, but not an insurmountable barrier."

The relevance for paper chemicals is that Akzo Nobel own Eka Chemicals and ICI own National Starch.