ICI, the UK maker of Dulux paint, has agreed to be bought by Akzo Nobel, the Dutch conglomerate, in a deal valuing ICI at £8.1 billion, (€11.96 billion).
But questions remain whether Akzo shareholders who oppose the deal will seek to block it.
The agreement, 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 turbulence in global markets over the past several 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.
"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 even if other shareholders share TPG Axon's view, because under Dutch law it will need yes votes from only 50.1 per cent of the shareholders who choose to vote, including proxies. 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. It is understood synergies will be between €260 million and €300 million. -(Financial Times service)
