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Investor Icahn pushes for sale of Burt's Bees parent Clorox

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Billionaire and activist investor Carl Icahn is pushing for a sale of Clorox, the consumer-products conglomerate that owns Durham-based Burt's Bees.

Icahn offered to buy Clorox for $76.50 a share, or more than $10 billion. But he also urged company officials to seek other "strategic buyers" including Procter & Gamble, Kimberly-Clark, Unilever and Colgate-Palmolive.

These potential acquirers could market Clorox's brands more aggressively overseas, Icahn wrote in a letter to Clorox CEO Donald Knauss.

"I would love to have this company," Icahn told CNBC today. But he added that he expects there will be competing offers.

Icahn already owns a 9.4 percent stake in Oakland, Calif.-based Clorox, and is eager to see a deal that would boost the value of the stock. He is known for taking big stakes in companies and pushing for buyouts or other changes.

In a statement, Clorox said it will review Icahn's proposal.

Clorox shares rose $5.56 to $73.99 in midday trading, the highest level in more than a decade.

Clorox owns a wide range of household brands, including its namesake bleach, Kingsford charcoal, Glad trash bags, Brita water filters, Hidden Valley salad dressing and more.

It bought Burt's Bees three years ago for about $925 million. In January Clorox announced that it would take a charge of up to $255 million to write down the value of Burt's, essentially admitting that it overpaid for the business.

As with other parts of Clorox's business, Burt's Bees saw sales growth slow during the recession. But it has rebounded recently. While still a small part of Clorox's total revenue, Burt's Bees is its fastest-growing division.

Burt's Bees employs about 350 people at its Durham headquarters and manufacturing operations, and is expanding into new overseas markets to fuel growth.

Veteran Clorox executive Nick Vlahos recently took over as vice president and general manager of Burt's Bees, known for its lip balms, lotions and other products made mostly from natural ingredients.


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Will Burts manufacture here and ship overseas, or..

will they attrition off jobs here and ramp up overseas?  Having a company go multinational like that, or a division, historically is the slippery slope.  Kind of like Walmart claiming 'buy USA' in the 80s when nationalistic fever was pushed back then... only to find most of Walmart stuff was already coming from elsewhere -- and now look at them.


Goodbye Burts?  Time to find something else to buy local, that's made local?

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About the blogger

Assistant Business Editor Alan M. Wolf joined the N&O in 1999 covering the business of health care. He became an editor in 2001, and helps oversee the paper's daily business coverage and Sunday Work&Money section. He lives in Clayton with his wife and two children. Reach him at 919-829-4572 or e-mail him.