ICI

The manufacturer and distributor of speciality chemicals, paints and coatings is back on our trading portfolio after we tipped it at the end of May. ICI has this week rebuffed a renewed and more generous offer from its Dutch suitor Akzo Nobel after an initial 600p-a-share takeover bid was dismissed at the end of June. But the Dutch firm wasn’t put off. On Monday, it tabled a 650p-a-share offer, but to no avail, since ICI has turned this latest offer down too and the shares survived a bearish session at the start of the week. Mic Mills at TradIndex says: ‘It seems likely that Akzo will come back in with a 675p [a share] bid, although that seems likely to be rejected, as ICI holds out for 700p.’ He adds that a 700p offer, even though way above the current trading level, would be justified as Akzo is determined to keep ahead of PPG Industries in the US, and taking over ICI would give it a massive boost.

ACTION: BUY ICI. • Target 700p • Stop loss 570p

TIME TARGET: 3 WEEKS