Revealing It Was In Buyout Talks, Herbalife Products Stock Surges
Carl Icahn just got himself a hundred million reasons to smile nowadays and he’s got nemesis Bill Ackman to thank for it.
Controversial supplements company Herbalife products just earned Icahn a single day paper profit of $139 million as shares surged to nearly 10 percent as news of the company going private started circulating as early as last week. Icahn owns a 24 percent stake in the said company.
Ackman, a known Icahn nemesis meanwhile, suffered a whopping $111 million loss as his $1 billion short bet on the same company went horribly down as confirmed by S3 Partners, a known financial analytics firm.
Still insisting that Herbalife products are a pyramid scheme, Ackman has lost approximately $149 million on Herbalife in 2017 alone.
On Monday, Herbalife stock closed at $68.04, gaining an additional 9.8 percent as it also announced that it will purchase back up to $600 million worth of shares priced between $60 to $68 respectively, via an auction that will that will end on the 19th of September.
The buyback was announced as talks with an anonymous investor to take the company private ended without a solid agreement being reached, which the company revealed as well. Herbalife announced last February that it has already repurchased $299 million worth of shares under a $1.5 billion buyback plan.
Chief Financial Officer John DeSimone had this to say: “Our board and management team are committed to enhancing shareholder value, and we believe today’s action is just one more step in meeting this goal.”
The possibility of going private is still on the table though, according to Herbalife.
Icahn agreed to not selling the shares during the offering or get 50 percent of the company’s shares except if he was buying all outstanding shares, a deal made in a separate agreement with Herbalife.
It was in 2012 when shares were trading in the mid-$30s when Ackman announced his $1 billion short position in the stock.
Both Icahn and Pershing Square (Ackman’s hedge fund) refused to comment.