Herbalife shares plunge after Carl Icahn lowers his stake in the company

On Friday Herbalife announced the results of its tender offer. The company said it was “oversubscribed” with 49.7 million shares tendered. It expects to accept 11.4 million shares at a cash purchase price of $52.50 per share or roughly $600 million. Herbalife will fund the stock repurchase from its term loans, credit facilities or cash on hand.

Icahn is selling 10.5 million Herbalife shares valued at approximately $550 million in the company’s tender offer, according to a source familiar with the matter. Without Icahn’s participation the offering would have been under-subscribed.

Dow Jones was first to report the size of Icahn’s tender offer sale.

“There’s an old Icahn rule, when you make over $1.5 billion on a situation, you sell a bit,” Icahn told The Wall Street Journal.

As the largest Herbalife shareholder, Icahn repeatedly battled Pershing Square’s Bill Ackman over his bearish stance on the nutritional supplement maker.

In March Icahn took a victory lap on his profitable Herbalife investment, telling CNBC he had “a billion” dollar profit in the stock.

The investor seemed to reference Ackman’s exit from his losing bearish bet as a reason why he’s reducing his stake.

“We believe Herbalife’s business is stable, the short-sellers have largely exited, and the Company is well-positioned for the future,” Icahn said in the Friday filing.

Herbalife did not immediately respond to a request for comment.

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