Billionaire investor Carl Icahn spoke to Bloomberg TV's Carol Massar and Matt Miller about his decision to raise his offer for Clorox, and the possibility that Icahn may break up the company if his bid is completed.
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Carl Icahn on why Clorox did not trade higher today, and whether investors are taking the offer seriously:
"I think [investors] are taking it pretty seriously because the stock has traded up quite a bit from the $67 to $68 when we made the first offer. So it's trading below $80 because the company has still not said that they will put the company up for sale."
"I think this company belongs to the shareholders and they should be given this opportunity. Because the centennial plan, I don't think it is working that well. In my mind, this is one of the problems in American corporations to the public, that a lot of boards and CEOs don't understand that the company belongs to the shareholders."
On why the tenor of talks between Icahn and Clorox have changed:
"We read their first letter where [Clorox] decided to take this approach of putting a pill in a 10%, which I think that is reprehensible. Again, I do like Don Knauss. I've met him and we seem to get along all right. Frankly, he is taking the wrong tact."
"The absurdity is, what does their past record really have to do with the fact that their shareholders should have the right to take a 25%, 30% premium? The shareholders should have that right. As I say in my letter, what is the board risking? They have nothing to lose…If the board and the CEO had a lot of risk and a lot of money to lose, they might certainly take a different approach."
On why shareholders are not asking for the Icahn deal to get done at $80:
"That is my whole point. I think [shareholders] would. I think [shareholders] should be given that choice. I just wanted to make sure they understood my bid is credible. I am there to buy it."
"I think the shareholders might have a nicer choice because I really do believe that they are great synergies and there will be higher bids, but I am not promising that. I do believe there will be a better choice for them."
On whether Icahn has spoken to other prospective bidders:
"I really can't speak to that. My lawyers would be really upset if I even talked about that."
On whether Icahn anticipates that there will be other bidders for the company:
"We have done a lot of homework on this and the synergies in this are great for one of those kind of companies [like P&G] because they will save $600 million in synergies. I don't even think the company [Clorox] will dispute that."
"These companies would be bringing in $950 million in cash flow to the bottom line just by the stroke of a pen. I think that is a pretty compelling thing. I've done this all my life. But, make no mistake, I'd be very happy to buy this. Because I do think it cheap at $80 for a buyer like myself. But I think shareholders should be given the right."
On whether, if Icahn bought Clorox, he would split it up:
"We might do that. If we buy it, we might split it up and possibly keep one of the divisions. I really do not want to go into [which division]. I think it's premature. I haven't put it into a 13D nor do we have a final solution on that."
Icahn on what he thinks fair value for the company is:
"I'd like to buy the company so every time I say it's worth more, they say well, then you don't want to buy it. But we do. I think if I buy it at $80, it's a good deal for a private investor who can do things with it. "
"I think the shareholders should really have that choice because I think if the company just stands alone the way it is now, I do not think the company's stock will go higher."
"I do think the numbers are very compelling. If a large buyer came in and got those synergies, they could pay $100 per share and still make $900 million a year extra to their bottom line. Now, is there a guarantee that anybody will come in? No. But there is a guarantee that I will be there at $80 per share, if they give me due diligence."
On whether there will be antitrust concerns over the deal:
"We've looked at it and I don't think that would be a problem. But I can't speak to that, I'm not an antitrust lawyer. But I do think there are enough buyers out there. "
On what would happen if Icahn does not get shareholder support:
"We want to avoid a proxy fight…I hope that does not happen. As you see in the letter, a simple way out is going to the shareholders and finding out what they want. Do they want to have the right to see this company put up for sale? They have that option. Listening to what the shareholders say and both of us abiding by it."
On Icahn's conversations with Don Knauss:
"Yes. I called [Don Knauss] last night pretty late, it was earlier in California. I called to tell him the letter was coming. We had, I believe, a respectful chat, as he says."