Citigroup Says The Clorox Co Takeover Rumor Is Bunk

The Clorox Co CLX closed Monday sharply higher after a report that it rejected a takeover offer from an unnamed suitor that put a 20 percent premium on Clorox's market price.

But an analyst thinks the report of a spurned offer is inaccurate and notes that separate news Monday that the company will exit Venezuela could boost annual earnings by $0.12 per share.

An acquisition of Clorox is "unlikely" because of its currently pricey stock as well as its lean cost structure.

"There would be little fat for a buyer to trim," Citigroup's Wendy Nicholson said in a note Monday.

The report, in Friday's New York Post, cited unnamed sources and said the suitor was rejected by Clorox at some point in the past "three to six months."

Nicholson also quibbled with the Post's list of "logical suitors," saying that Procter & Gamble and Unilever plc would seek to acquire brands in emerging markets, while Churdh & Dwight has a market capitalization significantly smaller than Clorox.

Although Venezuela represented only 1.4 percent Clorox's annual sales of $5.6 billion, operations there produced an annualized loss of $23 million in earnings before interest and taxes, according to Nicholson.

Clorox closed Monday at $97.23 per share, up more than 7 percent.