ICI has rejected a £7.2 billion bid from Dutch chemical firm Akzo Nobel, the British chemical company has revealed.

The bid's disclosure could encourage other companies to make rival bids for the UK firm.

Akzo made the 600p per share bid on 4 June 2007, but the offer was rejected unanimously by the ICI board 'on the grounds that it significantly undervalues ICI'. On the back of this news, ICI shares opened up 16 per cent at 638p the day the bid was announced.

'ICI would represent a highly attractive addition' according to a statement from Akzo, which hasn't ruled out making a revised bid. The company has a healthy cash supply after recently selling its drugs division to US pharmaceutical company Schering-Plough for €11 billion (£7.5 billion).

Market rumour suggests the US's Dow Chemical and German firm BASF will make rival offers for ICI, according to a report in the Financial Times. Dow and BASF are the world's first and second largest chemical companies by sales, respectively.

James Mitchell Crow

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