The German chemicals group BASF has told Dutch newspapers it is not interested in purchasing chemical firms, including ICI, as they are too expensive.
Board member Stefan Marcinowski told Dutch daily newspaper Het Financieele Dagblad that acquiring other chemical companies is not 'financially viable'.
"They are not cheap," he added. "They are close to their maximum value. ICI and Akzo trade for around 12 times EBITDA (earnings before interest, tax, debt and amortisation). That is a heavy cost."
Business analysts had been speculating the German company would table a bid for the British chemicals company following Akzo Nobel's rejected £7.2bn cash offer last month.
Dow Chemical of the United States, and Reliance Industries of India have also been rumored as potential suitors for ICI.
The news come days after Akzo Nobel was a given an ultimatum by Britain's Takeover Panel. It now has one month (the deadline is August 9) to decide whether to press ahead with a new bid.
Under British takeover rules, Akzo will be barred from launching another takeover for six months if it does not make a bid by August 9, unless an offer is made by another company.
Analysts expect it to make a higher offer to halt any rival bids while sources close to the company told Reuters news agency that Akzo Nobel is considering a higher bid, 'but is prepared to delay a move'.
However, Akzo's move could be thwarted as Dow Jones is reporting hedge funds such as Atticus Capital building up a stake to halt the Dutch paint company raising its offer.
This tale could yet take a further twist as Akzo itself has become the target of takeover speculation.
Analysts speaking to Reuters have said private equity is interested in the coatings sector, and particularly the Dutch paint company, because of benefits such as strong cash generation and brands.