Imperial Chemical Industries Share Discussion Threads

[chemical_ali] 11/8/2007 11:46

Reminds me of VOD UK 3G license auction - absolutely determined to get it despite destroying economic value. Just too much of a bother to even consider taking an alternative strategy.

Reckon Akzo shares will tank on Monday. Bad luck TPG-Axon. But will getting 50.1% really be straight forward. Anyone have shareholder information? All the annual report has is -

In % 2006 2005
United States 50 59
The Netherlands 20 18
United Kingdom 11 4
Others 19 19

[bigboots] 11/8/2007 08:09

BID CONFIRMED

ICI agrees to £8bn Akzo deal
By Sarah Spikes and Salamander Davoudi

Published: August 10 2007 22:03 | Last updated: August 10 2007 22:03

ICI has agreed to be bought by Akzo Nobel, the Dutch conglomerate, in a deal valuing the UK maker of Dulux paints at £8.1bn, although questions remain about whether Akzo shareholders who oppose the acquisition will seek to block it.

The deal, which is likely to be announced by Monday, values ICI at about 679p a share – including 670p in cash and an extra 9p in dividends – and represents a 45 per cent premium to ICI's price in mid-March, when Akzo's sale of a pharmaceuticals business fuelled speculation about a bid for ICI.

Some ICI investors had been determined to secure an offer of 700p a share, but given that Akzo has come up from its first indicative offer of 600p a share and the turbulence in global markets over recent days, they are seen as unlikely to oppose the deal.

The position of Akzo investors, however, is still unclear, as some, including TPG-Axon, a US-based fund that holds 3.5 per cent, are bitterly opposed to the deal, seeing it as too expensive.

TPG-Axon sent a letter to Akzo's board shortly after Akzo lifted its 600p offer to 650p saying it opposed the acquisition. Sources close to TPG-Axon have since said that, in spite of Akzo's taking on German partner Henkel to help finance the deal, the price was still too high.

"Why Akzo is determined to buy a highly cyclical business near the top of the cycle and thereby lose most or all of its cash, just as that cycle looks set to turn for the worse, is hard to understand," said a person close to TPG-Axon.

Akzo is in a strong position to proceed with the acquisition even if other shareholders share TPG-Axon's view, because under Dutch law it will need approving votes from only 50.1 per cent of the shareholders who choose to vote, including proxies. Even if there is a small turnout, the rule requiring a simple majority will apply.

Some Akzo shareholders who have had concerns said they were reserving judgment until seeing the offer document which will tell them the value of synergies that Akzo will derive.

[highlander2] 10/8/2007 22:15

BASF & Dow Chem about to start an auction??
Why would they allow Akzo a clear field if
the price drops?

John McAdam has done his work and will not
refuse this offer - in my opinion.

Akzo shareholders will know that refusing this
deal will leave Akzo out on a limb. Dulux Paints
and their Dulux Decorator Center network is expanding
and erodng the decorating/DIY business from all its
competitors.
The future is bright - the future is Dulux!!!!!!

[ride daice] 10/8/2007 16:47

I think the risk is loosing the gap upto 670p...50p or so. That's balanced with getting a couple of quid back (I reckon) if the markets continue to collapse and there is no deal. That's what I'm pondering.

[shiny1000] 10/8/2007 16:43

daft computer playing funny games...sorry about the repeated posts.

[shiny1000] 10/8/2007 16:43

AKZO have spent too much time and money to pull out now, but no doubt we shall find out.

[shiny1000] 10/8/2007 16:43

AKZO have spent too much time and money to pull out now, but no doubt we shall find out.

[shiny1000] 10/8/2007 16:42

AKZO have spent too much time and money to pull out now, but no doubt we shall find out.

[shiny1000] 10/8/2007 16:42

AKZO have spent too much time and money to pull out now, but no doubt we shall find out.

[shiny1000] 10/8/2007 16:40

Ride....sub £4.00, I doubt it, very risky to take a short position on here, but hey, ponder over the w/e and do let us know!

[chemical_ali] 10/8/2007 16:39

what will the share price be if Akzo pulls out? is there commercial logic for them to go ahead in the current environment? what are the chances of Akzo shareholders approving a deal in the current environment? how will deteriorating housing sector affect paints in US? will rising interest rates and credit market issues affect paints in UK and elsewhere?

so many questions

[ride daice] 10/8/2007 16:37

shiny,

What happens if the board of Akzo refuse to agree to the takeover at 670p and the deal is off ? It's already known that they are concerned that Akzo will overpay and given that world markets are plummeting it makes ICI look all the more overvalued. I don't think this is a done deal yet and my personal opinion is that if there is no deal then these are going sub 400p very quickly. So a short position might be in order....I'm gonna ponder that one over the w/e.

[shiny1000] 10/8/2007 16:24

good buy this at the moment.....in light of the falls today.

[brulot] 10/8/2007 11:13

My thoughts exactement,happy at 6.70 plus dividends.

[tourist07] 10/8/2007 08:58

Well, a fairly dramatic fall over the past 24 hrs from 6.40 to 6.25. Maybe not so dramatic in view of the stock market generally, but is it a market issue or a company issue.

Personally, I think that the extension to Monday is good news (as extensions go). They could have asked for 30 days. To only ask for 3 days suggests that there is not much to clear up in my view.

My only worry at the moment is that Azco will reassess the deal in the light of current market turbulence and its possible spillover into US growth and therefore demand.

But on balance, I think this one is highly likely to go through and that Azco will just use the "turbulence" argument to extract slightly tougher terms. After all, where would the ICI share price go now if they walked away. £5.00?

Just my thoughts. Added a few today at £6.255

[tourist07] 09/8/2007 09:26

Hmmm, just posted in time ... looks like 3. it is! Extension can be up to 30 days.

[tourist07] 09/8/2007 08:55

Well, its "put up or shut up day" .... only three realistic possibilities:

1. Azco do not submit a bid - seems least likely to me as it prevents them from doing so for another 6 months, although they can reserve the right to re-enter in the event that another formal bid emerges.

2. A recommended offer is announced, presumably on similar terms to those doing the rounds - namely £6.70 Ex Div

3. Azco request an extension of time - which I suspect is the most likely. Unless ICI oppose the extension (which seems highly improbably given that the discussions seem fairly amicable), I don't see what grounds there would be for rejecting a request for an extension. After all, they have only had 3 days of Due Diligence, which ain't a lot.

Unfortunately, as a holder, I supsect 3. is the most likely so we will be kept in suspense just a little bit longer.

Ahh well, Divi coming up on 22nd anyway.

Just passing through ...

[highlander2] 07/8/2007 14:54

Last article I promise - from ft.com

As ICI lures Akzo to the hook, let the auction begin
By Chris Hughes

Published: August 6 2007 20:07 | Last updated: August 6 2007 20:07

It sounds like merger magic. ICI has teased a higher takeover offer out of Akzo Nobel, its Dutch chemicals rival, and one that seems acceptable to the board. Yet Akzo has barely had to lift a finger to afford it.

Akzo's latest indicative offer for ICI is worth 670p a share, plus up to 9p in dividends, against last week's pitch of 650p a share. The sweetener has persuaded ICI to let Akzo do due diligence. It all points to ICI recommending a firm offer within days.

The price rise/drop clock is ticking??? Strange price drop!!

[highlander2] 07/8/2007 11:47

An interesting opinion from the Times.




One of the reasons for the difficulty is that Akzo's shareholder base has changed considerably this year, Mr Knight said. He now estimates that hedge funds or activist investors could constitute more than 40 per cent of Akzo's register.

However, he noted: "On the plus side, the option of voting down the bid to force Akzo as a takeover target itself is less likely, given the current credit crunch on private equity."

Shareholders could be holding out for a higher bid. So far, speculation has swirled around BASF, the German chemicals group, and Dow Chemical, the American group, as the two most likely counter-bidders.

Analysts, however, believe that a bid from BASF is unlikely, given that the group is busy digesting more than €10 billion (£6.8 billion) of prior acquisitions. A bid from Dow is also seen as unlikely since the US group could have taken advantage of ICI's lower share price when it was trading at £4.50 six months ago if it had been serious about a deal.

However, Dow Chemical is believed to be considering its options and is not ruling out a bid for ICI or Akzo itself.

There are also potential antitrust concerns, given the overlap of Crown and Dulux in the British and Irish markets. Sources said yesterday that Akzo would file its proposals to overcome any regulatory concerns once it had launched a formal offer. Yesterday's raised bid was the latest twist in the battle for the 81-year-old British coatings and chemicals manufacturer. Akzo initially tabled a 600p proposal in June, but ICI immediately rejected the offer as undervaluing the company. It also dismissed a second approach last week at 650p.

The raised approach and yesterday's fresh 670p bid included a simultaneous side-deal to sell ICI's adhesives and electronic materials businesses to Henkel. In a statement yesterday, Akzo said that the deal with Henkel was worth £2.7 billion, which sources said meant that Henkel was effectively paying the entire 70p extra in cash.

Although no details of proposed synergies from the deal have yet been given, sources said that they would be upwards of £250 million and that both ICI and Akzo investors would back the deal once they had seen the numbers.

[56richard] 07/8/2007 10:55

I am certainly betting on the deal being done but clearly the market is not so sure or the share price would be higher. This is probably why -

"The biggest hurdle remains approval of the deal by Akzo shareholders. We estimate the chances are better than evens but difficult to call," Collins Stewart analyst James Knight said.

[highlander2] 07/8/2007 09:44

£6.70 all the money. Divi sweetener still available to buyers as xd date approx. 23rd Aug. Dow would have to put an offer on the table PDQ to upset the party! I agree with post 1390 re DD timescale. Is this a done deal??

[leadersoffice] 07/8/2007 08:50

Does anyone think Dow Checmical might gate crash the party by offering just a little more ie £6.80 for instance??

[rcoates96] 06/8/2007 18:28

Slightly surprised that this is not up more today, given the existence of a tentative offer subject to a few days due diligence ... you can't do much DD in three days!

[leadersoffice] 06/8/2007 09:39

Does anyone think Dow Checmical might gate crash the party by offering just a little more ie £6.80 for instance??