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Icahn Enterprises offers to acquire Clorox in deal worth $10.2B, Clorox reviews proposal
NEW YORK (AP) ' Activist investor Carl Icahn is offering to take Clorox Co. private in a deal that values the consumer products maker at about $10.2 billion.
The billionaire investor said in a regulatory filing Friday that his firm has proposed paying $76.50 a share for Clorox, which makes cleaning products as well as Hidden Valley salad dressing and the Burt's Bees personal care product line.
Clorox, has about $5.2 billion in annual revenue, said it will review the proposal.
The offer is an 11.8 percent premium over Thursday's closing price of $68.43 a share.
Clorox stock jumped $4.77, or 7 percent, to $74.20 in morning trading.
Icahn said he outlined the proposal in a letter sent Thursday to Clorox Chairman and CEO Donald Knauss.
Icahn is the largest shareholder in Oakland, Calif.-based Clorox. He values the deal at $12.6 billion, and wrote that Icahn Enterprises will contribute $3.8 billion to the deal using cash on hand and $1 billion in Clorox stock.
Jefferies & Co. said it will arrange the remaining $7.8 billion in financing, the letter said.
In the letter, Icahn encouraged Clorox to seek other acquisition offers from competitors like Procter & Gamble Co., Kimberly-Clark Corp., Colgate Palmolive Co. Icahn said if Clorox accepts its bid by July 29 and Icahn Enterprises is unable to complete the deal, the firm will pay Clorox $100 million.
Citi Investment Research analyst Wendy Nicholson said Icahn appears to be offering a fair price for Clorox. But she said she does not think Clorox's competitors would be interested in acquiring the company because it does most of its business in slower growth businesses in the U.S. and little in emerging markets.
Icahn Enterprises bought a 9.4 percent stake in Clorox in December. Icahn is offering a premium of 21 percent based on the price of Clorox shares before it invested in the company. Its shares have traded between $60.65 and $72.43 in the last 12 months.
Other Clorox products also include Brita water filters, K C Masterpiece sauces, Kingsford charcoal, and Glad food and trash products.
Icahn's other holdings at the end of the first quarter include the drugmaker Biogen Idec Inc., movie studio Lions Gate Entertainment Corp., Motorola Solutions Inc. and power producer Dynegy Inc., according to a May 16 regulatory filing.