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Jul 15 2011 / Clorox Stock - Symbol CLX

Ichan Offers $76.50 A Share - Sort Of

 
 

Clorox Stock - Carl Ichan Sort Of Offers To Buy It

I very much appreciate Carl Ichan's "sort of" 12.6 billion bid for Clorox, which prices the shares at $76.50, but honestly earlier this week all the activity in the Call Options and Stock certainly should have triggered a warning light to the SEC. Isn't this just the kind of event that screams "insider"?.

Everyone enjoys a profit and there is nothing wrong with that. The only reason I got into Clorox earlier this week was because of all the activity and the knowledge that Carl Ichan had bought shares in February

Below is the year to date chart for Clorox. Where Ichan announced his position in Clorox is pretty obvious. This week's activity is also obvious.

Clorox Stock Chart - January 2011 to July 2011

 

Isn't this why there is an SEC? Aren't they suppose to be aware of these types of events? No wonder so many investors feel that there is no level playing field. Meanwhile Ichan's actual bid is more a push to the Clorox Board of Directors, to put the company up for sale. In a letter he told the Board of Directors that he believes $76.50 a share is fair value and believes shareholders are better served by putting the company up for sale.

His letter he gave the directors of Clorox a list of companies which the board of directors could approach, to be bought out. In other words Ichan is placing Clorox out there for competitors to consider for purchase. He also indicated in the letter, that if Clorox accepts his bid by July 29 and Ichan Enterprises is unable to complete the deal, the firm will pay Clorox $100 million. I wonder if this will just be part of the profits he had made in the stock after purchasing it in December 2010.
 

So does this mean that Clorox is up for sale? Not really. Does it mean Ichan is getting tired of holding so many shares and wants to see some appreciation in share value? Who knows. Does it mean that Clorox might be sold. Perhaps. Is this just another Carl Ichan event which he is famous for? Absolutely.

It should be interesting to watch events going forward. Meanwhile I am nicely set up, one way or the other, in Clorox. At this morning's open I sold my short term calls and bought and closed my puts. You can read about the trade here.

 

 
 

 
 

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