Billionaire investor Carl Icahn, campaigning to oust Clorox Co. (CLX) directors and put the company up for sale, made his third takeover offer in two months for the maker of bleach and Glad trash bags.
If Icahn succeeds in replacing Clorox’s board and the company still doesn’t find a buyer, he said he will pay $78 a share, or $10.3 billion in cash and notes to “back stop” the sale process, according to a statement today.
The move seeks to put pressure on Clorox, which last month rejected Icahn’s two earlier proposals, including one at a higher price of $80 a share, and said the investor was unlikely to be able to complete them. The Oakland, California-based company said it would continue to implement its strategy and return excess cash to shareholders.
“The Clorox shareholders should have the right to decide for themselves whether to accept my bid or a better bid which I believe will be forthcoming from the sale process,” Icahn said in today’s statement.
Clorox rose $1.47, or 2.1 percent, to $70.10 at 3:10 p.m. in New York Stock Exchange composite trading after earlier rising as much as 5.4 percent. The shares had climbed 8.5 percent this year through yesterday.
Icahn has suggested companies including Procter & Gamble Co. (PG), Colgate-Palmolive Co. and Kimberly-Clark Corp. as strategic buyers for Clorox. Japan’s Kao Corp. was looking at the company, the New York Post reported this month, citing an unidentified person familiar with the situation.
“He doesn’t really want to buy the company,” said Jack Russo, an analyst at Edward Jones & Co. in St. Louis. “He wants to start an auction process.”
Kathryn Caulfield, a company spokeswoman, didn’t immediately return a phone message and e-mail seeking comment today. Clorox said Aug. 19 that it hadn’t yet scheduled its 2011 annual meeting, where Icahn is seeking to replace all 11 directors.
Icahn’s three offers involved different prices and different forms of payment. The first, on July 14, was for $76.50 a share in cash. The funds would come in the form of equity investments from Icahn and his affiliates and from $7.8 billion in debt financing arranged by Jefferies Group Inc.
The second proposal, on July 20, was for $80 a share in cash, and Icahn offered to put $5.2 billion of the amount in escrow to prove he would follow through.
Today’s offer of $78 is in cash and registered senior unsecured notes, and isn’t conditioned on financing or due diligence, according to Icahn’s statement.
Icahn is proposing to fund the acquisition in part with registered senior unsecured notes. Clorox senior unsecured notes due in October 2017 are rated Baa1 by Moody’s Investors Service, or three levels above non-investment grade.
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