NEW YORK ( TheStreet) -- Carl Icahn has set his sights on a buyout of Clorox (CLX), according to a regulatory filing early Friday that indicates he's proposed to purchase the company for $76.50 per share, or roughly $12.6 billion.
According to the disclosure filed with the
Securities and Exchange Commission, Ichan sent a letter to Clorox CEO and Chairman Donald Knauss making the bid, which values Clorox shares at a 12% premium to Thursday's closing price of $68.43. Entities controlled by Icahn own roughly 9.4% of Clorox's outstanding common stock, making him the company's largest shareholder.
Icahn notes in the letter that the $76.50 consideration represents a premium of 21% since his initial investment in late December. He expects said roughly $7.8 billion in financing has already been secured for the deal through Jefferies & Co., and that the remainder of the consideration would consist of his equity contribution and cash on hand.
Icahn noted that the proposal includes a hefty termination fee of $100 million that he will pay if Clorox agrees to the deal and then Icahn subsequently doesn't close, and encouraged the company to shop around for a better offer as well, which of course has the potential to greatly increase the value of his investment."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 says in the letter. "Thus, 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. If the company does so, we are confident the process will result in numerous superior bids for this company." As of Thursday's close, Clorox shares were up 11% so far in 2011. The company's brands include its namesake bleach and cleaning products, Armor All and STP automotive care products, Kingsford Charcoal, and Burt's Bees personal care products, among others. The company is expected to report revenue of more than $5 billion this year.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV