The Deal That May Be
Icahn (through Icahn Enterprises) has stepped up with a bid of $76.50 per share for the rest of Clorox (Icahn owns a little more than 9% of Clorox shares). That is a 12% premium to a stock that has been a pretty notable laggard versus the S&P 500 over the past two years (though an outperformer on the five year comparison).
If Clorox were to take this $10.2 billion deal, it would be at a valuation of about 10.6x trailing EBTIDA and less than two times forward sales - valuations that would still be below comparables like Procter & Gamble (NYSE:PG) and Colgate Palmolive (NYSE:CL).
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2 comments:
CLX was spun off from PG in the late 60s because of regulatory issues. In fact, there could be regulatory issues for many of the likely bidders and CLX does not make a good fit for others. All in all, it seems that the most likely bidder would be private capital but there would appear to be little gains to be made from re-organizing what most agree is a well-run CLX. I have a feeling this is not going to be a big win for Ichan but I could be wrong.
I mostly agree with you. The only way it makes sense is if one of these companies really is run by a numbskull desperate for growth.
And Icahn's notion that CLX is worth $100 is just flat-out nuts.
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