Herbalife Announces Self-Tender Offer Seeking to Purchase up to $600 Million of Its Common Shares

financial finance

Herbalife Ltd. has commenced a “modified Dutch auction” self-tender offer to purchase in cash up to an aggregate $600 million of shares of its common stock at a per share price not greater than $108.00 nor less than $98.00 (the “tender offer”).

The closing price of Herbalife’s common shares on the New York Stock Exchange on April 17, 2018, the last full trading day before the commencement of the tender offer, was $103.02 per share. The tender offer is scheduled to expire at 5 p.m. EST, on May 16, 2018, unless the offer is extended.

The Los Angeles-based company believes that the repurchase of shares pursuant to the tender offer is consistent with its long-term goal of maximizing shareholder value. The board of directors evaluated the company’s operations, financial condition, capital needs, regulatory requirements, strategy and expectations for the future and believes that the tender offer is a prudent use of the company’s financial resources. The board determined that a tender offer is an appropriate mechanism to return capital to shareholders that seek liquidity under current market conditions and allows shareholders who do not participate in the tender offer to share in a higher portion of the company’s future potential.

The full terms and conditions of the tender offer are discussed in the Offer to Purchase, dated April 18, 2018, and the associated Letter of Transmittal and other materials relating to the tender offer that Herbalife filed with the Securities and Exchange Commission.

The tender offer is not contingent upon obtaining any financing. However, the tender offer is subject to a number of other terms and conditions, which are described in detail in the Offer to Purchase.

The company is currently soliciting shareholder approval of a previously announced two-for-one stock split. If approved at Herbalife’s Annual General Meeting of Shareholders to be held on April 24, 2018, the company expects the common shares will go ex-dividend on the New York Stock Exchange on May 15, 2018. The Depository Trust Company is expected to allocate split share entitlements on May 17, 2018 (the day after the tender offer is scheduled to expire). Accordingly, when completing the Letter of Transmittal shareholders should specify the total number of common shares they are tendering on a pre-split basis.