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Clorox rejects Icahn bid as too low

By Jessica Wohl and Lisa Baertlein

CHICAGO/LOS ANGELES (Reuters) - Clorox Co on Monday rejected as too low an offer from billionaire investor Carl Icahn that values it at more than $10 billion.

The company, known for its bleach products, also adopted a poison pill to make an unwanted takeover more expensive.

"We're certainly not opposed to a sale, just a steal," said Clorox Chairman and Chief Executive Don Knauss, who told Reuters in a telephone interview that he had a "mutually respectful conversation" with Icahn earlier on Monday.

Knauss declined to say what an attractive price for the 99-year old company would be and he would not comment on whether other bidders had emerged.

The company, which also sells Burt's Bees lotions and Hidden Valley salad dressings, would be open to any "credible, adequate" idea to increase shareholder value, Knauss said.

The poison pill provision adopted by Clorox would be triggered when a person or group acquired 10 percent or more of Clorox's common stock in a transaction not approved by Clorox's board of directors.

The poison pill would make it more costly for Icahn to push through a deal without the approval of Clorox's board.

Clorox, based in Oakland, California, was not the only company defending itself against Icahn on Monday. Forest Laboratories Inc said it planned to nominate at its shareholders meeting a 10-person board slate that included three new members, as the drugmaker fends off the investor.

A representative for Icahn, Clorox's largest shareholder, was not available for comment.

"The prohibitively high cost to acquire (Clorox) under the shareholder rights plan makes it unlikely Mr. Icahn will move forward without the approval of the board," BMO analyst Connie Maneaty wrote in a note to clients.

On Friday, Icahn put Clorox in play with an offer of $76.50 per share. That offer represented a 12 percent premium to the stock's Thursday closing price and a 15.5 percent premium to its price in February, before Icahn announced his stake in the company.

Icahn also suggested that rival companies should consider paying even more for Clorox.

Icahn said in a letter that synergies resulting from any deal with a third-party strategic buyer could make even a $100 per share offer viable to the likes of Procter & Gamble Co , Unilever Plc or Colgate-Palmolive Co .

Clorox is more heavily exposed to the United States than larger consumer products makers and other competitors.

The U.S. consumer is "certainly in a fragile state," but we are seeing some stabilization, said Knauss, who added that the key for Clorox was to introduce new products.

The company is planning products to help prevent the spread of infections in homes, hospitals and acute care centers, and plans greater focus on environmentally friendly products.

The product pipeline "looks better now than in the five years I have been here," said Knauss, Clorox's CEO since October 2006.

Shares of Clorox, which is scheduled to report quarterly earnings on August 3, closed down 2 percent at $73.04 on the New York Stock Exchange and slipped another 0.2 percent in extended trading to $72.90.

(Additional reporting by Paritosh Bansal and Jonathan Stempel in New York; Editing by Steve Orlofsky)

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