Icahn cleans up on Clorox bet

February 12, 2011, 2:42 AM UTC

Squeaky clean!

Is Carl Icahn trying to clean up his act?

You might think so judging by his interest in Clorox (CLX). Icahn, the activist investor who backed the now bankrupt Blockbuster movie chain and is knee deep in a battle for the energy company Dynegy (DYN), disclosed Friday a 9% stake in the bleach maker.

News of his interest sent the shares surging 7% to a 52-week high.

Icahn bought 1 million shares and 11.5 million call options, which confer the right but not the obligation to buy shares at a certain price, for $322 million, he said in a Securities and Exchange Commission filing. He began buying the options in December and continued through Friday, the filing shows, giving him an effective cost basis in the mid-$60s.

Icahn borrowed some of the money for the purchases in margin accounts and raised $115 million by selling 11.5 million Clorox put options, conferring the obligation to sell the shares on or just before a certain date.

The stock closed up $5 at $71 and change.

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