Clorox Rebuffs Icahn, Again

The Clorox Company–Carl Icahn saga continues. The cleaning products company yesterday issued a statement in response to a press release issued by Icahn, the company’s largest shareholder.

The billionaire, who is seeking election to the board of Clorox, said he expects the slate of directors he nominated for the board would immediately begin a comprehensive auction process to sell the company if they were elected.

According to Clorox, the company’s board “remains open to any credible proposal, and believes that Mr. Icahn’s latest proposal is highly conditional, substantially undervalues the company and is not credible. Among other things, Mr. Icahn is now looking to fund up to half of the purchase price of his inadequate, highly conditional proposal by borrowing from Clorox stockholders.

“The board continues to believe that a credible proposal must deliver compelling value and certainty. A credible proposal includes, among other things, a fully underwritten debt commitment and clearly identified and adequate equity capital that, in the aggregate, would be sufficient to complete a transaction. In addition, a credible proposal should contain sufficient detail to demonstrate that it provides market-standard provisions that assure certainty of completion. The highly conditional revised Icahn proposal does not satisfy any of these conditions.

“The board has concluded that the best path to creating significant value for stockholders is the continued execution of the Centennial Strategy. Under this strategy, Clorox has achieved a three-year total stockholder return of 43 percent versus 10 percent for the S&P 500 and 34 percent for our comprehensive consumer packaged goods peer group1. In addition, Clorox has returned more than $2.7 billion in cash to stockholders in the form of dividends and share repurchases since fiscal year 20062, and the company has doubled the dividend from $1.20 to $2.40 per diluted share in the past five years.”

Goldman, Sachs & Co. and J.P. Morgan Securities LLC are serving as financial advisers, and Wachtell, Lipton, Rosen & Katz is legal adviser.