Icahn Not Giving Up on Clorox

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.

Posted by on September 7th, 2011 at 11:11 am


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