Its shares soared more than 16 per cent as analysts saw higher bids as a possibility.

ICI, which makes Dulux paints, said its board unanimously rejected the approach “on the grounds that it significantly undervalues ICI.‘‘

Akzo Nobel, based in Amsterdam, said ICI would be “a highly attractive addition to its focused coatings and chemicals business.‘‘ The company acquired the British chemicals company Courtaulds PLC for 2.8 billion euros ($3.7 billion) in 1998.

Dow Chemical Co. of the United States, Germany‘s BASF Group and Reliance Industries Ltd. of India have also been rumoured as potential suitors for ICI.

“A bid battle developing between Akzo and Dow Chemical or other interested parties cannot be ruled out, fuelling speculation that ICI could ultimately fall to an offer of as much as 700 pence per share,‘‘ said Jeremy Batstone, analyst at Charles Stanley.

ICI shares rose nearly 16 per cent to 634.50 pence ($12.54) Monday on the London Stock Exchange, well above Akzo Nobel‘s offer of 600 pence ($11.86).

James Knight, an analyst at Collins Stewart in London, believes Akzo Nobel might need to pay 650 pence to win ICI. A bidding war, he said, is possible, “though we think Akzo is in a unique position of having the synergy potential and financial firepower.‘‘

ICI employs around 4,000 people in the U.K.; Akzo Nobel has about 60,000 employees. Akzo shares fell 1.04 per cent to 60.94 euros ($81.62) in Amsterdam.

PIN/AP