Carl Icahn sold more than half of his stake in Herbalife Nutrition Ltd.
HLF 0.54%
and resigns from his positions on the board of the nutritional supplements company, taking a step back from a long-standing investment he fiercely defended against the attack of rival activist investor William Ackman.
Icahn sold about $ 600 million of his 16% stake in Herbalife in recent days to the company, according to people who knew the subject. This leaves him with a stake of approximately 6%, worth $ 400 million. Given that their holdings will fall below the level stipulated in an agreement that Mr. Icahn has with the company, also plans to resign from the five seats on the board currently occupied by its representatives, according to people.
The move helps consolidate a big win for the messy octogenarian billionaire, who is estimated to have earned more than $ 1 billion in investment.
Icahn has been Herbalife’s largest shareholder since 2013. He stayed with the company through the challenges of Mr. Ackman and the regulators and the resignation of his CEO after he was caught on a tape encouraging a colleague to sideline the rules. of the expense account.
Icahn first bought the shares in late 2012. The investment posed a major challenge for Mr. Ackman, who had bet on the company and publicly defended its business model, which is based on a network of distributors. calling it a pyramidal scheme. The company has said it is a legal multilevel marketing organization and was fighting it at every turn.
Herbalife has a market value of about $ 6.3 billion.
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The opposing bets of the two big activists led to a bitter public confrontation, with Mr Ackman predicting that shares would go to zero and the men exchanging jabs in a party calling on live television. Ackman largely came out of his $ 5 billion lost bet in 2018.
The agreement of Mr. Icahn with the company in 2013 gave him two seats and later took over more of what is now a 13-member board. Its representatives include former MPs Jonathan Christodoro and Nicholas Graziano and longtime general counsel Jesse Lynn.
Herbalife has a market value of about $ 6.3 billion. Its shares were almost flat in 2020, but have multiplied by several in the last decade. The company reported better-than-expected third-quarter earnings in November and said it expected fourth-quarter sales to grow 10% to 20% year-over-year. He also appointed a new CFO.
Herbalife has been buying shares again and the deal with Mr Icahn comes after the company offered to buy a large part of its shares at the last closing price of $ 48.05, according to people who knew the theme. Mr. Icahn accepted the offer, in part because he sees no additional activism needed in the company, they said.
Icahn sold $ 550 million worth of shares of Herbalife in 2018 and told the Wall Street Journal at the time that “there is an old Icahn rule, when you earn more than $ 1.5 billion in a situation, in come a little ”.
Write to Cara Lombardo a [email protected]
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