Carl Icahn Doesn't Want Clorox (CLX), He Wants Procter & Gamble (PG) to Buy It
Tweet
Share
E-mail
Get Alerts CLX Hot Sheet
Price: $143.55 +0.24%
Overall Analyst Rating:
NEUTRAL (
Down)
Dividend Yield: 3.3%
EPS Growth %: -9.9%
Overall Analyst Rating:
NEUTRAL (
Down)Dividend Yield: 3.3%
EPS Growth %: -9.9%
Join SI Premium – FREE
Billionaire investor Carl Icahn created a frenzy on Wall Street Friday after launching an unsolicited $76.50 per share takeover offer for consumer product maker Clorox (NYSE: CLX), where he is the largest shareholder.
After trading over $76 per share in pre-open earlier, shares have backed off these highs as investors view an Icahn takeover of the company as unlikely.
Icahn admitted he doesn’t want to complete the deal, although he said he stands ready to do so. Icahn is strongly encouraging the company to hold an open and friendly "go-shop" sale process without providing Icahn's group a contractual last look right.
With his offer, Icahn is looking to force the Board to review alternatives, which hopefully for Carl leads to the sale of the company to another buyer at a higher price.
In his letter to the company, Icahn said "now" is the right time for Clorox to be aggressive in pursuing a strategic transaction and believes companies including Procter & Gamble (NYSE: PG), Unilever (NYSE: UL), Colgate Palmolive (NYSE: CL), Reckitt Benckiser, Kimberly Clark (NYSE: KMB), and Henkel AG are likely bidders.
"With the 10 year treasury near 3%, and at least six significantly larger potential Strategic Buyers with limited acquisition opportunities in this industry, now is the time for this Board to move," Icahn said.
Owning 9.4% of the outstanding shares of Clorox common stock, Icahn stands to benefit massively if the company is sold. The activist's offer comes at a 21% premium to where he initiated his position on December 20, 2010. Icahn believes Clorox is worth $100 per share to a strategic buyer, or a 58% premium to where he bought it.
So while the headlines read, "Carl Icahn Offers to Buy Clorox," don't be fooled. Buying Clorox is the last thing he wants. However, getting Clorox sold to another is the first thing.
Shares of Clorox last traded at $73.70, up 7.7% from Thursday's closing price.
After trading over $76 per share in pre-open earlier, shares have backed off these highs as investors view an Icahn takeover of the company as unlikely.
Icahn admitted he doesn’t want to complete the deal, although he said he stands ready to do so. Icahn is strongly encouraging the company to hold an open and friendly "go-shop" sale process without providing Icahn's group a contractual last look right.
With his offer, Icahn is looking to force the Board to review alternatives, which hopefully for Carl leads to the sale of the company to another buyer at a higher price.
In his letter to the company, Icahn said "now" is the right time for Clorox to be aggressive in pursuing a strategic transaction and believes companies including Procter & Gamble (NYSE: PG), Unilever (NYSE: UL), Colgate Palmolive (NYSE: CL), Reckitt Benckiser, Kimberly Clark (NYSE: KMB), and Henkel AG are likely bidders.
"With the 10 year treasury near 3%, and at least six significantly larger potential Strategic Buyers with limited acquisition opportunities in this industry, now is the time for this Board to move," Icahn said.
Owning 9.4% of the outstanding shares of Clorox common stock, Icahn stands to benefit massively if the company is sold. The activist's offer comes at a 21% premium to where he initiated his position on December 20, 2010. Icahn believes Clorox is worth $100 per share to a strategic buyer, or a 58% premium to where he bought it.
So while the headlines read, "Carl Icahn Offers to Buy Clorox," don't be fooled. Buying Clorox is the last thing he wants. However, getting Clorox sold to another is the first thing.
Shares of Clorox last traded at $73.70, up 7.7% from Thursday's closing price.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Adnoc Unit Said To Consider Investment In UGI (UGI) Propane Business - Bloomberg
- Mondi Says It Does Not Intend To Make An Offer For DS Smith
- Exclusive-Bentley Systems explores options amid takeover interest, sources say
Create E-mail Alert Related Categories
Hedge Funds, Mergers and Acquisitions, RumorsRelated Entities
Carl IcahnSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
