On July 26 Clorox rejected a revised unsolicited takeover bid of $80 per share from billionaire investor Carl Icahn and announced that its board of directors unanimously concluded that it "substantially undervalues the company is not credible."
On July 20 Icahn raised his bid to $80 per share, after Clorox (CLX - Get Report) rejected his July 15 offer of $76.50 on July 18 and adopted a shareholder rights plan, which amounts to a "poison pill" that protects against hostile buyers through share dilution.
Icahn said July 20 that his firm and affiliates would escrow $5.2 billion, inclusive of his ownership of 12.5 million shares of Clorox, adding that there is no legitimate concern that he could raise the remaining $7.8 billion in financing needed to complete his proposed deal. Icahn sent another letter to Clorox CEO Donald Knauss on July 20 calling the board's concerns "misguided," and wrote that "for Don Knauss and the rest of the board to claim our proposal remains inadequate and at the same time tout your record for shareholders seems a bit absurd."
Icahn's original proposal was widely viewed as merely a way to put Clorox in play. Entities controlled by Icahn own roughly 9.4% of Clorox's outstanding common stock, making him the company's largest shareholder. He tapped consumer products makers Procter & Gamble (PG - Get Report), Unilever (UN), Kimberly-Clark (KMB - Get Report) and Colgate-Palmolive (CL - Get Report) as possible "strategic buyers" that might offer "superior bids." "We are in a unique position as your largest shareholder in that we are wearing two hats -- one as a shareholder and another as a buyer," Icahn wrote in his July 15 letter.