Shares in BOC Group have increased rapidly by more than a fifth after the industrial gases group said it had received a preliminary approach from smaller German rival Linde that looks set to value it at comfortably more than Â£6 billion.
The Board of BOC which was forced to issue a statement following a 5 per cent surge in its share price earlier this morning, said it had 'unanimously' rebuffed the bid approach - which it said was at an early stage and 'subject to a number of pre-conditions including financing, anti-trust approvals and due diligence.'
The Directors of BOC stated their continuing confidence in the current strategy of the group to deliver growth and excellent returns to its shareholders as an independent company.
Having valued BOC at just over Â£5.8 billion at the market close last night, the City added nearly Â£1.2 billion to its worth in the minutes following confirmation of the approach - taking its stock market valuation to just over Â£7 billion.
Linde is understood to have offered a premium to BOC's recent share price and is keen to secure control of its core industrials gas business.
The group also operates a logistics arm and BOC Edwards, which supplies industrial gases to semiconductor makers.
In the 12 months to the end of September last year, BOC made pre-tax profits of Â£593.6 million on turnover of just under Â£3.8 billion.
As well as habitually being associated with an approach from Linde, the City has also linked BOC with BASF of Germany and Air Liquide of France.
While Air Liquide tried six years ago to take over BOC - in an effort that was eventually defeated on anti-competition grounds - BASF is believed to have ruled itself out following a strategic review carried out a year ago. One source described the idea of an approach by BASF as 'nonsense.'
But, despite the group's rejection of Linde's initial bid proposal, the City scented that Linde would probably come back with a higher offer - or even prompt Air Liquide to have another tilt at the group.