Cleaning products giant Clorox on July 18 rejected buyout king Carl Icahn's unsolicited $12.6 billion takeover bid, saying it substantially undervalues the company.
Clorox said its board unanimously agreed to turn back Icahn's offer, calling it "neither credible nor adequate."
But it also adopted a new stockholder rights plan, a "poison pill" defense to protect shareholders in the case of a hostile raid on the company.
"The rights plan is intended to enable all Clorox stockholders to realize the long-term value of their investment in the company," the board said in a statement.
"It will not prevent a takeover, but should encourage anyone seeking to acquire the company to negotiate with the board of directors prior to attempting a takeover."
Last week Icahn, who already owns 9.4% of the company, offered Clorox shareholders $76.50 per share, a premium of 12% to its previous closing price.
Icahn Enterprises would pay for the deal using $4.8 billion in cash and stock and $7.8 billion in debt financing, Icahn said in his letter. He said at the time he hoped his offer would stimulate other takeover bids.
Clorox chief executive Donald Knauss said in a letter to Icahn released publicly that the board "remains open to considering any credible plan to create significant stockholder value."
"Your proposal substantially undervalues the company and is neither credible nor adequate," he said.
The rights plan, which would effectively double the number of outstanding shares, appeared directly aimed at Icahn. It will take effect if one investor obtains a 10% shareholding stake without the support of the board.
By issuing new shares it would substantially raise the cost of a takeover to any hostile bidder.
"It will not prevent a takeover, but should encourage anyone seeking to acquire the company to negotiate with the board of directors prior to attempting a takeover," the board said.
Before the board's statement and rights plan were released, Clorox shares closed down 2% for the day at $73.04.
Copyright Agence France-Presse, 2011
