Carl Icahn corners Clorox with 13-bn bid
21 Jul 2011
Billionaire activist-investor Carl Icahn yesterday raised his unsolicited bid for Clorox to $13 billion, a day after the board of the household products maker rejected his earlier $12.6-billion offer and adopted a shareholder rights plan to guard against a hostile takeover.
In a stinging rebuke to Clorox's chairman and CEO Don Knauss, Icahn raised his bid to $80 a share from his earlier offer of $76.50, valuing the Oakland, California-based company at about $10.2 billion or $13 billion including debt of $2.8 billion – and urged Clorox to let the company shareholders decide whether to sell their stake in the company.
In his initial offer, Icahn had offered to pay $100 million as break up fee to Clorox if he failed to close the deal for reasons including the failure of investment firm Jefferies & Co to raise the finance for the takeover.
On 19 July, Clorox had rejected Icahn's $12.6-billion offer, saying that the unsolicited, conditional proposal from Icahn Enterprises substantially undervalues the company. "Our board has unanimously determined Icahn's unsolicited proposal is neither credible nor adequate."
Clorox also questioned Icahn's plans of raising $7.8-billion debt, despite a letter from Jefferies & Co expressing confidence in being able to raise finance for the deal.
Cornering the Clorox board, Icahn yesterday offered to put $5.2 billion, including his own 9.4-per cent stake in Clorox, into an escrow account to demonstrate his credibility.
