Billionaire investor Carl Icahn offered to buy Clorox Co. in a $10.2-billion deal, but also invited the household products maker to solicit rival bids, which he said would yield much higher offers for the company.
Mr. Icahn’s $76.50 per share offer represents an 12 per cent premium to the stock’s Thursday closing.
In a letter to Clorox’s chief executive officer Donald Knauss, Mr. Icahn said he was confident that the company could get “numerous superior bids” from large consumer products companies.
Mr. Icahn, known for pushing up the stocks in which he invests, said synergies resulting from any deal with a third-party strategic buyer could make even a $100 per share offer viable to the likes of Kimberly Clark , Colgate Palmolive and Reckitt Benckiser .
“While we stand ready and able to buy Clorox, we encourage you to hold an open and friendly ‘go-shop’ sale process where all the synergistic buyers are offered due diligence and invited to bid,” Mr. Icahn said in the letter dated July 14.
On being asked if Mr. Icahn’s proposal constituted a real bid, a Clorox spokesman said, “That’s really a question for Mr. Icahn. We don’t know what his plans are beyond what has been published.”
“Our board is going to be reviewing the proposal.”
In his letter, Mr. Icahn said he beneficially owned 9.4 per cent of the outstanding shares of Clorox common stock and is its largest shareholder.
The activist investor, who said he has already arranged for $7.8 billion in financing through Jefferies & Co., offered to pay a $100 million break-up fee if he is unable to close the transaction, provided Clorox agrees to the deal by July 29.
Clorox, whose diverse lineup of products includes Clorox bleach, Brita water filters and Hidden Valley Ranch salad dressing, posted disappointing quarterly results in May and forecast weak earnings for the next fiscal year as it grappled with rising packaging and materials costs.
Mr. Icahn’s offer represents a new high for the stock, which had gone up to $72.43 in February when he announced a 9.08-per-cent stake in the company. At the time, he had described the stock as undervalued.