August 18, 2022

DealBook: Icahn Makes Bid for Clorox

Clorox bleachJustin Sullivan/Getty ImagesBottles of Clorox bleach in a San Francisco grocery store.Carl C. Icahn's net worth was estimated by Forbes at  $10.5 billion in 2010.Mark Lennihan/Associated PressCarl C. Icahn’s net worth was estimated by Forbes at  $10.5 billion in 2010.

Carl C. Icahn bid $76.50 a share for the household goods maker Clorox, in a proposal that values the company at $10.2 billion, and seems intended to attract other bidders.

The offer, disclosed in a regulatory filing on Friday, represents a 21 percent premium to Clorox shares on Dec. 20, the day before Mr. Icahn began building his stake in the company.

Mr. Icahn, the billionaire investor, disclosed in a filing to the Securities and Exchange Commission that he had sent a letter to Clorox chief executive, Donald R. Knauss, that he would seek to buy all the company shares he did not already own.

Mr. Icahn owns 9.4 percent of the company. He revealed the stake earlier this this year.

The offer, the filing states, is backed by a “highly confident” letter from the investment bank Jefferies Company that it would be able to arrange $7.8 billion in financing for the deal, which would come in addition to equity contributed by Mr. Icahn’s affiliates.

Mr. Icahn wrote in a letter to Mr. Krauss that “while we stand ready and able to buy Clorox, we encourage you to hold an open and friendly “go-shop” sale process,” saying his firm was “confident the process will result in numerous superior bids for this company.”

Citing low interest rates, corporate cash piles and Clorox’s potential to be accretive to other companies’ earnings, Mr. Icahn went on to enumerate potential strategic buyers of the company, including Procter Gamble, Unilever, Colgate Palmolive, Reckitt Benckiser, Kimberly Clark, Henkel and SC Johnson.

Clorox said that its board of directors would review the proposal. The company has hired Goldman Sachs and J.P. Morgan Securities as its financial advisers, and Wachtell, Lipton, Rosen Katz as legal counsel.

Clorox rose $7.62, or 11.14 percent, to $76.05 in pre-market trading in New York on Friday after slipping $0.56, or 0.81 percent, on Thursday to close at $68.43.

Mr. Icahn, a native of Queens and a graduate of Princeton, founded Icahn Co. in 1968. Since then, he made his name as a corporate raider and activist investor, swooping in on and challenging giants like RJR Nabisco, Phillips Petroleum, Viacom, Uniroyal, Time Warner, Yahoo, Motorola and more recently Lions Gate Entertainment.

His career took a turn this year, however. In March, just months after losing his lieutenant Keith Meister, Mr. Icahn said he would be returning the stakes of investors in his hedge fund to concentrate on running his own money.

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