09.02.11
Carl Icahn is betting that companies from Procter & Gamble Co., Colgate-Palmolive Co. (CL) and Unilever will pay a higher valuation for Clorox Co. than their own stocks are worth.
Billionaire investor Icahn, who’s campaigning for Clorox to put itself up for sale, said this week he would back up the process by offering to pay $78 a share if the Oakland, California-based company doesn’t find an acquirer. Icahn’s price tag values Clorox at 19.3 times profit, more than the earnings multiple of all six companies he has suggested as potential strategic buyers, according to data compiled by Bloomberg.
Even with a profit margin that’s higher than 95% of rival U.S. household products makers, it still may be difficult for Icahn to find a buyer willing to take on an entire company that produces everything from Glad trash bags to Hidden Valley Ranch dressing and Burt’s Bees lip balm, according to Harris Private Bank. After rallying to a record $74.55 on Icahn’s first takeover bid in July, Clorox shares are now trading 12% below his latest proposal, indicating investors aren’t convinced the company will be acquired.
Billionaire investor Icahn, who’s campaigning for Clorox to put itself up for sale, said this week he would back up the process by offering to pay $78 a share if the Oakland, California-based company doesn’t find an acquirer. Icahn’s price tag values Clorox at 19.3 times profit, more than the earnings multiple of all six companies he has suggested as potential strategic buyers, according to data compiled by Bloomberg.
Even with a profit margin that’s higher than 95% of rival U.S. household products makers, it still may be difficult for Icahn to find a buyer willing to take on an entire company that produces everything from Glad trash bags to Hidden Valley Ranch dressing and Burt’s Bees lip balm, according to Harris Private Bank. After rallying to a record $74.55 on Icahn’s first takeover bid in July, Clorox shares are now trading 12% below his latest proposal, indicating investors aren’t convinced the company will be acquired.
“I don’t see too many buyers coming out of the woodwork for such an expensive stock,” said Jack Ablin, chief investment officer for Chicago-based Harris Private Bank, which oversees $60 billion, said in a telephone interview with Bloomberg. “It just seems somewhat prohibitive to a strategic buyer. I don’t think there’s a buyer that would want the whole thing.”