Carl Icahn sold more than half of its stake in Herbalife Nutrition Ltd.
HLF 0.54%
and relinquishes his seats on the board of the nutritional supplement company, stepping back from a long-term investment he fiercely defended against an attack by rival activist investor William Ackman.
Mr. Icahn has sold approximately $ 600 million of his 16% Herbalife stake back to the company in recent days, according to people familiar with the matter. That gives him a share of about 6%, worth $ 400 million. Given that his stakes will fall below the level stipulated in an agreement Mr. Icahn has with the company, he also plans to give up the five board seats currently held by his representatives, the people said.
The move helps land a major win for the scrappy eighty-year-old billionaire, who is estimated to have made more than $ 1 billion from the investment.
Mr. Icahn has been Herbalife’s largest shareholder since 2013. He stayed with the company through challenges from Mr. Ackman and regulators and the resignation of the chief executive after being caught on tape encouraging a colleague to bypass the expense account rules.
Mr. Icahn first bought in the stock in late 2012. The investment presented a high-profile challenge to Mr. Ackman, who gambled against the company and publicly fought its business model, which relies on a network of distributors and a pyramid scheme. The company has said it is a legal multi-level marketing organization and has fought it at every turn.
Herbalife has a market value of approximately $ 6.3 billion.
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The opposing bets of the two great activists sparked a bitter public showdown, with Mr. Ackman predicted the stock would drop to zero and the men traded jabs in a screaming match on live television. Mr. Ackman largely abandoned his $ 1 billion losing bet for five years in 2018.
Mr. Icahn’s agreement with the company in 2013 gave him two seats and later took over more in what is now a 13-member board. His representatives include former deputies Jonathan Christodoro and Nicholas Graziano and longtime general counsel Jesse Lynn.
Herbalife has a market value of approximately $ 6.3 billion. Shares were about the same in 2020, but have multiplied in the past decade. The company reported better-than-expected third-quarter results in November and said it expected fourth-quarter sales to grow 10% to 20% year-on-year. It has also appointed a new chief financial officer.
Herbalife has bought back shares, and the deal with Mr. Icahn comes after the company offered to buy a large portion of its stock at the last closing price of $ 48.05, those familiar with the matter said. Mr. Icahn accepted the offer in part because he sees no need for additional activism at the company, they said.
Mr. Icahn sold $ 550 million in Herbalife stock in 2018 and told The Wall Street Journal at the time, “There’s an old Icahn rule: if you make more than $ 1.5 billion from a situation, you’re selling a little. “
Write to Cara Lombardo at [email protected]
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