Posts Tagged ‘CLX’

  • Icahn Pulls Out of Clorox
    , September 26th, 2011 at 11:36 am

    The AP reports:

    Billionaire investor Carl Icahn’s withdrawal of his slate of directors for Clorox Co.’s board likely stemmed from his inability to find a potential buyer for the consumer products company, an analyst said Monday.

    “We conclude Icahn’s real learning was likely that no strategic acquirer was ready, willing and able,” John San Marco of Janney Capital Markets wrote in a client note.

    In a filing with the Securities and Exchange Commission, Icahn said he still thinks selling the company — which makes salad dressing, beauty products and other goods — is the best way to maximize shareholder value but that most shareholders don’t seem to support the idea.

    Icahn, known for shaking up struggling companies, had proposed to either sell Clorox or buy it himself for at least $78 per share. The company had dismissed the proposal as not credible. In August, Icahn said he wanted to install himself and 10 other directors on the company’s board.

    I can’t say I’m surprised. The stock is currently at $66 per share. This was a waste of time and money for Icahn. The share price of CLX is now lower than where it was before Icahn started this crusade.

    This is what I wrote two months ago when CLX was at $74:

    In my opinion, these bids over-value Clorox. Wall Street currently expects the company to earn $4.06 per share this fiscal year (which ends next June). That values CLX at nearly 20 times forward earnings. That’s just too rich.

    I hate watching boards shoot down offers of over-payment. I doubt an offer like this will come again soon. I’m not sure any competing bids will come along, and Icahn may be forced to pull his offer. If I were a CLX shareholder, I’d get out of the stock right now.

  • Icahn Not Giving Up on Clorox
    , September 7th, 2011 at 11:11 am

    If nothing else, Carl Icahn is entertaining. When we last caught up with the billionaire, he was trying to take over Clorox ($CLX). Actually, that’s not quite correct. Icahn was bidding for Clorox is an attempt to get someone else to take it over. I’m not exactly sure how that makes sense but hey, it’s his money.

    First, Icahn offered $76.50 per share which the board shot down. He then came back with $80 per share which the board also shot down.

    The market never took Icahn’s bid very seriously although the stock did break above $74 per share. I wrote, “If I were a CLX shareholder, I’d get out of the stock right now.” I can claim I got that one was right as the market quickly soured on CLX. But August 18th, it dropped as low as $63.56 per share which was lower than where it was before Icahn made his first offer.

    Last week, Icahn said that if no one is willing to buy Clorox for $78 per share, he’ll buy the thing himself and break it up. Once again, the board showed no interest. The stock got up to $72 very briefly but it couldn’t hold on. The market clearly doesn’t take Icahn’s bids very seriously.

    My view is that Clorox is basically a $60 stock, plus or minus a few dollars. I’d only be interested in it if the market price fell close to $50, Other than that, you’re wasting your time with it. Let Icahn waste his money on this.