Carl Icahn's Herbalife Ownership Increases Due To Company Buyback ~ market folly

Thursday, October 12, 2017

Carl Icahn's Herbalife Ownership Increases Due To Company Buyback

Activist investor Carl Icahn has filed an amended 13D regarding his position in Herbalife (HLF).  Per the filing, Icahn now owns 26.22% of the company.  This is up from his previous ownership stake of 24%, but it's not due to him buying more shares.  He still retains the same amount as he previously did: 22.87 million shares.

Herbalife recently announced results from its self-tender offer to buy around $600 million of its own stock.  It accepted over 6.73 million shares at $68 per share.

Sellers of stock received a contingent value right (CVR) for each share tendered that provides a right to payment should the company be taken private in the next two years.  After the tender completes, HLF will have around 87 million shares outstanding.

As a result, Icahn's ownership percentage increased without him doing anything.

And as we've highlighted previously,  Bill Ackman continues to be short Herbalife as well.

Per Google Finance, Herbalife Ltd. is "a global nutrition company. The Company develops and sells weight management, healthy meals and snacks, sports and fitness, energy and targeted nutritional products, as well as personal care products. Its operating segments are based on geographical operations in six regions: North America; Mexico; South and Central America; Europe, the Middle East, and Africa (EMEA); Asia Pacific, and China. The Company categorizes its products into five groups: weight management, targeted nutrition, energy, sports and fitness, outer nutrition, and literature, promotional and other. As of December 31, 2016, it marketed and sold approximately 140 products encompassing over 4,700 stock keeping units (SKUs) globally. Its product categories include meal replacement; protein shakes; drink mixes; dietary and nutritional supplements containing herbs, vitamins, minerals and other natural ingredients; facial skin care; body care; hair care products; sales tools, and educational materials."

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