THE chances of a takeover at paints and chemicals group ICI grew yesterday as the company granted Dutch bidder Akzo Nobel “limited” access to its books.

THE chances of a takeover at paints and chemicals group ICI grew yesterday as the company granted Dutch bidder Akzo Nobel “limited” access to its books.

ICI, whose businesses include the UK market-leading paints brand Dulux, agreed to the move following an improved 670p per share offer from Akzo, valuing the UK company at £8billion.

The figure compares with Akzo's initial £7.2billion (600p per share) approach in June and a further advance on its £7.8billion (650p per share) offer which was rejected by ICI last week.

However, it is far from certain that the latest offer will succeed, with some ICI shareholders reported to be unwilling to accept an offer of less than 700p per share while some Akzo shareholders are said to be concerned at the size of the price already offered.

Akzo has only until Thursday to enter a formal bid under the Takeover Panel's “put up or shut up” deadline.

ICI said in its brief statement yesterday that there was no certainty that the latest approach would lead to an offer being made for the business.

It added: “The proposal is subject to a number of pre-conditions, including completion of due diligence. The board of ICI has agreed that Akzo can undertake certain limited due diligence, which ICI expects to be completed within a few days. A further announcement will be made in due course.”

ICI employs around 26,000 people worldwide, including 3,350 in the UK out of which the paints division accounts for 754 people, including 77 at a factory in Stowmarket. The ICI Imagedata business at Brantham, on the Suffolk-Essex border, employs a further 118 people.

Akzo Nobel was formed in 1994 through the merger of Netherlands-based Akzo with the Swedish company Nobel Industries.

Dulux, which has an estimated 40% share of the UK paint market, is though to be the main target of Akzo which under the takeover plan intends to sell on ICI's adhesives and electronic materials operations to German chemicals company Henkel.

Earlier this year Akzo sold off its pharmaceuticals business to Schering-Plough in order to focus on developing its paints and speciality chemicals operations. However, there has been speculation that a deal for ICI could result in a probe by the UK competition authorities, with Akzo's own Crown Paints brand itself having 15% share of the market.

There is also a possibility of Akzo facing competition from a rival bidder, with US companies DuPont and Dow, BASF of Germany and Reliance Industries of India all tipped as possible players.