By Dhanya Skariachan, Martinne Geller and Jessica Hall
NEW YORK (Reuters) - Billionaire investor Carl Icahn said on Tuesday he would backstop any auction of Clorox Co <CLX.N> with a $10.26 billion bid if his slate of nominees were elected to the board of the bleach maker.
The news came after the company's board unanimously rejected two offers from Icahn, who is Clorox's largest shareholder.
The shares of the 99-year-old company that makes a range of products from bleach to Burt's Bees lotions rose 3 percent, but are trading some $8 below Icahn's $78 per share offer, indicating investors do not see it happening either.
Icahn previous offer was to buy the company for $10.52 billion, or $80 a share, but Clorox rejected his overture as not credible, questioning whether he had the financing to fund a purchase.
On Tuesday, Icahn said he would fund at least half the purchase price in cash and the rest through bonds. Earlier, he said he had a "highly confident" letter of financing from Jefferies Group Inc <JEF.N>, which Clorox rejected.
"This is an odd tactic. He's saying he's offering $78 a share, but really, half of that is in notes. The average Clorox stock holder is not going to want that structure. This is a traditional company with a traditional shareholder base - they want cash or stock they recognize," said one consumer banker, who declined to be named because he was not authorized to speak to the media.
"It's a long-shot that he will gain control of the board and be able to launch an auction. Replacing the entire board is a radical move that would need significant shareholder support behind it. And I don't think it's there," the banker added.
Industry analysts also said the offer may not be good enough.
"Using the multiple that Unilever <ULVR.L> paid for Alberto Culver earlier this year as a guide, Morningstar analyst Erin Lash said Clorox should garner about $90 per share in a takeout.
"Clorox is a well-run, well-managed company," Lash said.
Icahn has a 9.51 percent stake in the bleach maker, a regulatory filing dated August 30 showed.
Clorox was not immediately available to comment on Tuesday.
A deal would be subject to the approval of the new Clorox board and would be voted on by Clorox shareholders, Icahn said.
"The Clorox shareholders should have the right to decide for themselves whether to accept my bid or a better bid which I believe will be forthcoming from the sale process," Icahn said.
(Reporting by Dhanya Skariachan; editing by John Wallace, Phil Berlowitz)