Herbalife Nutrition announced it will repurchase approximately $600 million of its common shares from Carl C. Icahn of Icahn Enterprises. The purchase of the shares, priced at $48.05 per share, is funded by the company’s cash on hand and existing credit facilities.
In 2013, while under pressure from short sellers, the company agreed to give Icahn Enterprises five seats on its board of directors as long as it held at least 14 million common shares. With this repurchase, Icahn will now hold approximately 8 million common shares and its representatives will resign from the board.
“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,” said Carl Icahn. “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.”
This transaction is part of the Herbalife’s 2018 share repurchase program. Including the $600 million repurchase from Icahn Enterprises expected to be finalized this week, the company will have repurchased a total of approximately $1.5 billion in shares.
“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. He was certainly there when we needed him. Carl took the time to get to know us and understand the benefits of our products and our direct sales business model and we have delivered value for him and our other shareholders. I look forward to his continued contributions as he will remain one of our largest shareholders. I am also grateful for his board representatives, who have provided invaluable guidance and insight that has contributed to our impressive growth.”