The Week Ahead: ICI under pressure to deliver as suitors line up

Imperial Chemical Industries has been on the receiving end of plenty of attention in the past few months, but a serious suitor is yet to step forward. Although the shares fell slightly last week, Merrill Lynch described the company, due to release first-quarter trading figures on Thursday, as an "increasingly attractive" bid target, especially at a time when the private equity market is buoyant and fresh from rejection at the hands of Sainsbury.

Market speculation has framed Dow Chemicals and Reliance Industries of India as two potential purchasers, while Dutch rival Akzo Nobel also fits the bill and is flush with cash after the €11bn sale of its Organon division.

However the pressure is on ICI. It needs to deliver a solid trading update and good numbers to maintain its market value, particularly should a takeover bid fail to materialise. In February's trading update, ICI announced adjusted pre-tax profits of £407m for 2006, with sales up 5 per cent to £4.8bn. The consensus forecast for pre-tax profits in the first quarter is £93m.

TODAY: The failure of long-running takeover talks with Ladbrokes came as no surprise to investors in 888 Holdings, the online gaming group, since there had been little word on the deal since October. The legal issues following 888's exit from the US market in the fourth quarter of 2006 proved too strong a disincentive for Europe's biggest bookie. Despite increased competition in non-US markets, February's pre-close trading statement pointed to a 7 per cent rise in full-year net revenue. Forecasts are optimistic with diversification into areas such as bingo expected to drive revenue. Analysts are looking for £34.9m in full-year pre-tax profits.

Results: Full year - 888 Holdings; Dana Petroleum; Designer Vision Group; Sirius Financial Solutions; Surgical Innovations Group; Thomson Intermedia; Watermark. First half - Connaught.

TOMORROW: A strong five-month trading update from Aberdeen Asset Management reinforced already high expectations for the first half of 2007. In December Aberdeen announced a 70 per cent increase in pre-tax profit on record levels of business. As global equity markets continue to perform strongly, the company looks well placed to capitalise on the misfortunes of competitors such as F&C. In March, Aberdeen also agreed to acquire parts of Deutsche Bank's Australian fund management business for up to A$148m in cash, and analysts have forecast £104m for pre-tax profits in 2007.

Results: Full year - Alexandra. First half - Aberdeen Asset Management; Imperial Tobacco Group; Phytopharm; Punch Taverns.

WEDNESDAY: Deutsche Bank reiterated a "buy" rating for the semiconductor group CSR last Thursday, helping to fuel a renaissance in its share price following a grim second half to 2006 that saw its shares halve in value. US peers including Intel and Texas Instruments have already reported strong first quarters, and anything less from CSR would be a disappointment. CSR's final lawsuit settlement with the Washington Research Foundation last week should also see investors in a bullish mood. First-quarter revenue is forecast at $155m.

Despite reports that its second-quarter production and sales have suffered due to the shutdown of its main furnace in December, shares in the mining group Lonmin remain close to an all-time high. Traders have been speculating that Xstrata might be interested in Lonmin's assets, and bid talk has bolstered the share price. But underlying earnings per share are expected to fall to $0.91 from $1.10 in the year-earlier period, and some analysts think that the bid hype masks underlying problems in terms of unmet production targets.

Results: Full year - Home Retail. First half - Lonmin. First quarter - CSR. Third quarter - British Sky Broadcasting Group.

THURSDAY: Shares in British American Tobacco dropped slightly last week, despite rumours that it may be involved in CVC Capital's bid for Spanish tobacco rival Altadis. However with a consensus forecast of £3.1bn for pre-tax profits in 2007 BAT remains a cash cow, and few analysts would rule out more corporate activity in the sector.

The first quarter has been a low point of the year for oil companies, with the effects of lower oil prices more than offsetting higher refining margins. Shell's mixed fortunes in the first quarter, with earnings down 5 per cent on the same time last year, could be set to revive in the second half, however, as analysts predict a rebound in oil prices. Pre-tax profits for the first quarter are projected at £5.6bn.

Results: Full year - Betex Group. First quarter - British American Tobacco; Imperial Chemical Industries; Mapeley; Millennium & Copthorne Hotels; Royal Dutch Shell; Smith & Nephew; Tomkins; Unilever.

FRIDAY: Results: First quarter - BG Group.