Clorox stock rises on Unilever merger rumors
LOS ANGELES, Aug 26 (Reuters) - Shares of Clorox Co. (NYSE:CLX -
news) rose on Thursday on rumors the maker of household products ranging
from bleach to trash bags could be a potential partner for Anglo-Dutch food
and consumer products group Unilever Plc (quote from Yahoo! UK & Ireland:
ULVR.L).
Unilever's stock rose as much as 3 percent on speculation Clorox might be interested in acquiring the European
giant.
Clorox stock, which rose as much as 3.3 percent in New York Stock Exchange trading, ended up 69 cents at
$45.06 after earlier reaching $46.50.
In London trading, shares of Unilever rose 1.51 percent or 9 pence to 607.53 pence, having touched 615 pence.
But analysts in Europe and the United States said such a deal was highly unlikely. They also said Clorox had not
signaled it was looking to be acquired by a larger company.
``Clorox is pint-sized compared to Unilever and a reverse takeover is most unlikely. Clorox has a market cap of
$13.5 billion against Unilever's $60 billion and Henkel owns 25 percent of Clorox,' said one European food
industry analyst.
``Of course this speculation may have something at its root to do with Henkel. But Clorox and Unilever is
inconceivable,' said the analyst.
Henkel, a German household chemicals group, holds a 24.7 percent stake in Clorox, which is based in Oakland,
Calif.
Clorox declined to comment.
Earlier this month, Clorox reported that although its second-quarter earnings had met Wall Street expectations,
sales slid and it would need to post additional special charges.
Clorox said net customer sales were down 2.6 percent in the company's fiscal fourth quarter and that it faced $23
million in charges during fiscal 2000.
Clorox took charges of $79 million in the fourth quarter for a restructuring and its merger with First Brands Corp.
``Just because they've missed a quarter, doesn't mean they are looking to get bought,' said Constance Maneaty,
an analyst at Bear Stearns. ``Clorox is going to fix what's broken and keep on going.' |
