Carl Icahn has sold more than half of his stake in Herbalife Nutrition Ltd.
HLF 0.54%
and resigns from the board of directors of the nutritional supplements company, taking a step back from a long-term investment that he fiercely defended against attack by rival activist investor William Ackman.
Icahn has sold about $ 600 million of its 16% stake in Herbalife to the company in recent days, according to people familiar with the matter. This leaves him with a stake of about 6%, worth $ 400 million. Given that his holdings will fall below the level stipulated in an agreement that Mr. Icahn has with the company, he also intends to give up the five management positions currently held by his representatives, people said.
The move helps consolidate a big profit for the octogenarian billionaire, who is estimated to have earned well over $ 1 billion in investment.
Mr. Icahn has been Herbalife’s largest shareholder since 2013. He remained with the company through challenges from Mr. Ackman and regulators and the resignation of his CEO after he was caught on the tape, encouraging a colleague to outline the rules of the account. costs.
Mr Icahn bought the shares for the first time at the end of 2012. The investment was a major challenge for Mr Ackman, who bet against the company and publicly criticized his business model, which is based on a network of distributors, calling it a scheme. pyramid. The company said it is a legal multi-level marketing organization and has fought against it at every turn.
Herbalife has a market value of approximately $ 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 the shares would reach zero and the men trading jigs in a loud match on live television. Ackman has largely outperformed his $ 1 billion bet, losing five years in 2018.
Mr Icahn’s agreement with the company in 2013 gave him two seats and he later took over in what is now a 13-member council. Its representatives include former MPs Jonathan Christodoro and Nicholas Graziano and longtime general counsel Jesse Lynn.
Herbalife has a market value of approximately $ 6.3 billion. Its shares were roughly fixed in 2020, but have risen several times in the last decade. The company reported better-than-expected earnings in November in the third quarter and said it expects sales to grow 10% to 20% year-on-year in the fourth quarter. He also appointed a new CFO.
Herbalife bought shares back and the transaction with Mr Icahn comes after the company offered to buy much of its shares at the last closing price of $ 48.05, people familiar with the matter said. Mr Icahn has taken up the offer in part because he sees no need for additional activism at the company, they said.
Mr. Icahn sold $ 550 million of Herbalife shares in 2018, telling the Wall Street Journal at the time that “There is an old Icahn rule, when you earn over $ 1.5 billion in a situation, you sell little.”
Write to Cara Lombardo la [email protected]
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