Los Angeles-based Herbalife Ltd. has announced its intention to change the company name to Herbalife Nutrition Ltd.
In addition, the third-largest direct selling company in the world announced several strategies designed to enhance shareholder value.
According to the company, the name change to Herbalife Nutrition Ltd. reflects the company’s commitment to leadership and expertise in the field of nutrition.
“We believe changing our company name to Herbalife Nutrition is more representative of our purpose to make the world healthier and happier, and reflective of our strategies and investments to be the global leader in the nutrition industry,” said Herbalife CEO Rich Goudis.
As part of the plan to enhance shareholder value, the company has updated its capital allocation strategy and is preparing to pursue a “modified Dutch auction” tender offer seeking to purchase between $450 million and up to $650 million of shares of the company’s outstanding common stock. The company is also seeking to refinance a portion of the company’s $1.15 billion outstanding Convertible Notes due on August 15, 2019, as the company believes new terms will allow the company greater flexibility in the use of its capital. The company expects these transactions will be completed in the second quarter of 2018.
The anticipated tender offer is consistent with the company’s long-term asset allocation strategy, a strategy that has resulted in the company repurchasing approximately $3.9 billion of its outstanding common stock, representing approximately 91 million shares, since 2007. The company also intends to effect a two-for-one stock split of the company’s common stock.
“Herbalife’s strong financial performance is a testament to the demand for our great-tasting, quality nutrition products, the company’s unique, effective and personalized distribution channel and the company’s global geographic reach,” said Goudis. “This would be the first split in seven years and is part of our comprehensive program to increase shareholder value.”
The proposals seeking to change the company’s name and effect a stock split require shareholder approval and will be submitted to a vote at the company’s Annual General Meeting of Shareholders on April 24, 2018. If the shareholders approve the stock split, it is anticipated that the record date will be May 7, 2018.