Activist investor Carl Icahn is selling off most of his stake in Herbalife Nutrition and relinquishing his firm’s seats on the company’s board. Herbalife entered into an agreement to repurchase approximately $600 million of the Company’s common shares beneficially owned by Carl C. Icahn and certain of his affiliates at a purchase price of $48.05 per share.
This was the closing price of Herbalife Nutrition’s common shares on December 31, 2020, the last trading day prior to the execution of the purchase agreement. Herbalife is buying back the shares as part of a repurchase program to require approximately $1.5 billion of its own shares.
By January 7, Icahn Enterprises will own about 6% of Herbalife’s outstanding shares which amounts to less than half of the more than 20 million shares Carl Icahn one owned. Icahn held a 15.5% stake in Herbalife as of September 30, 2020.
The 84-year-old billionaire is estimated to have earned more than $1 billion from his Herbalife investment. It was first made back in 2012 when Ackman went head to head with rival investor Bill Ackman who tried to short Herbalife’s stock.
Carl Icahn stated: “I made the initial investment in Herbalife Nutrition more than eight years ago, because I believed strongly in the Company’s strategy, products and business model. When I began purchasing the shares, I believed it was undervalued for extraneous reasons that I thought made little sense. At the time, I believed the Company was in need of an activist and that certainly turned out to be correct.”
“Yet, the time for activism has passed as the Company has grown, and I don’t typically invest billions of dollars in companies where our role as activist is not needed. That being said, Herbalife Nutrition’s products and business opportunity are needed now more than ever, and I look forward to remaining a shareholder of the Company.”
“Our decision to repurchase these shares is a testament to the strength of our business and our long-term growth prospects,” said John Agwunobi, chairman and CEO of Herbalife Nutrition. “I am grateful to Carl for his friendship, advice, and support and deeply appreciate his unwavering faith in our company, our products, and our distributors.”