Dutch chemical group Akzo Nobel and its partner, German consumer products group Henkel are conducting a due diligence review of ICI and are expected complete the process within days. .

This follows Akzo Nobel saying that it could raise its offer for its UK rival ICI to $16.3 billion, valuing ICI''s shares at £6.70 per share, representing a a 41-per cent premium on ICI''s share price when it made its first offer..

The UK Takeover Panel has set a deadline of 9 August for Akzo Noble and reports say that it all goes well, a takeover agreement could be announced by the deadline.

Only last week, ICI had rejected an enhanced all cash $15.9-billion offer at 650 pence a share takeover proposal by Akzo and continued to maintain that even this offer undervalued the UK-based company.

In June it had turned down a 600 pence per share offer from Akzo.

The latest bid could still face opposition from regulators as a takeover of ICI by Akzo may attract the competition authorities since ICI''s Dulux paint has a 40-per cent market share in the UK, while Akzo''s Crown Paints has 14 per cent.

Moreover, rival bidders could also jump into the fray with a counter bid. Those identified as likely new contenders capable of a rival bid for ICIC include Dow Chemicals, DuPont, Germany''s BASF or even India''s Reliance Industries.

There have also been suggestions that Akzo''s own investors, particularly some hedge funds, who own an estimated 25 per cent of Akzo stock, are said to be restive over the strain the latest offer would place on the company''s balance sheet, could vote against the deal.

TPG-Axon, a £5.3-billion fund, which holds a 3.5-per cent stake in Akzo, has already written to the firm stating its opposition to the ICI deal.

Akzo had exited its pharmaceuticals business Organon BioSciences by selling it to Schering-Plough for $14.5 billion and has agreed to sell ICI''s adhesives and electronic materials businesses to Henkel, if the takeover goes ahead.