Fitch may cut Clorox

Fitch Ratings said it placed Clorox Co.'s BBB+ issuer default rating, bank facility and senior notes and F2 short-term issuer default rating and commercial paper on Rating Watch negative in response to Icahn Enterprises LP's sweetened $80 per share hostile offer for Clorox, which values the company at about $13 billion.

In its proposal Icahn expects Clorox's leverage to increase to 7 times after financing, the agency said. On a last 12 month basis this would indicate total debt in the $7.8 billion dollar range.

Despite Clorox's stability and strong brands, efficient operations and exemplary cash flow generation, leverage of this significance would clearly render ratings deep into non-investment grade territory, the agency said.

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