Clorox Rejects Icahn Offer - Analyst Blog
July 19 2011 - 1:38PM
Zacks
Clorox Corporation (CLX) rejected the recent
offer of a conditional acquisition from activist investor Icahn
Enterprises L.P. Icahn offered $76.50 per share for Clorox, the
offer being subject to due diligence, financing and other
conditions. After evaluating and discussing the proposal, Clorox’s
financial and legal advisers came to the conclusion that the offer
undervalues the company.
The advisers pointed out that the company to its credit
continues to create shareholder value in the form of dividends and
share repurchases. From fiscal 2006 to date, the company has
distributed $2.6 billion in cash to stockholders in the form of
dividend payouts and share repurchases. The company has
consistently increased its dividends, doubling it from $1.20 to
$2.40 per diluted share over the past five years
Clorox is one of the world's leading manufacturers of consumer
products. Its strong portfolio of brands, including Clorox, Glad,
Brita, Armor All, Burt’s Bees, STP and Kingsford, offers a
competitive edge to the company and bolsters its well-established
position in the market.
Moreover, Clorox has established definite financial goals to
measure its progress. These goals include 3% to 5% annual sales
growth before acquisitions, and 75 to 100 basis points of annual
improvement in the operating margin. It speaks for the company that
it has competed effectively with peers of the likes of
Colgate-Palmolive Co. (CL) and Procter
& Gamble Co. (PG).
We maintain a long-term Neutral recommendation on Clorox
Corporation. Moreover, the company has a Zacks #3 Rank, implying a
short-term Hold rating on the stock.
COLGATE PALMOLI (CL): Free Stock Analysis Report
CLOROX CO (CLX): Free Stock Analysis Report
PROCTER & GAMBL (PG): Free Stock Analysis Report
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