Karl Econ sells more than half of its Herbalife steak


Carl Icann sold more than half of his stake in Herbalife Nutrition Limited

HLF 0.54%

And is relinquishing its seats on the nutrition-supplement company’s board, a step back from a long-term investment he fiercely defended against an attack from rival activist investor William Ekman.

According to people familiar with the case, Mr. Iken sold nearly $ 600 million of his 16% Herbalife stake to the company in recent times. He leaves her with about 6% stake, valued at $ 400 million. Noting that Mr Ikan would go below the level set in an agreement with the company, he also planned to give up five board seats currently held by his representatives, the people said.

The move has helped Scoppi achieve a major victory for the octogenarian billionaire, who is estimated to have earned more than $ 1 billion on investment.

Since 2013, Mr. Icahn has been the largest shareholder of Herbalife. He is clinging to the company over the challenges of Mr. Ekman and the regulators, and after the resignation of his chief executive he was caught on tape spending to encourage an associate to skirt-account rules.

Mr. Eakan first bought into stock in late 2012. The investment had represented a high-profile challenge to Mr. Ekman, who had bet against the company and publicly crusaded against his business model, which relies on a network of distributors, calling it the Pyramid scheme. The company has said that it is a legal multi-tiered marketing organization and competed at every turn.

Herbalife has a market value of about $ 6.3 billion.


Photo:

Mario Tum / Getty Images

The protests by two big-name activists led to a scathing public performance, with Mr. Ekman predicting that the stock would fall to zero and male trading jabs in a screaming match on live television. Mr. Ekman largely pulled out of his $ 1 billion, five-year losing bet in 2018.

In 2013 with the company Mr. The Econ settlement gave him two seats and he later made another change to the 13-member board. His representatives include former deputy Jonathan Cristadoro and Nicolas Graziano and longtime general counsel Jesse Lynn.

Herbalife has a market value of about $ 6.3 billion. Its shares were largely flat in 2020 but have grown manifold over the past decade. In November the company expected better earnings in the third quarter and said it expected 10% to 20% growth year-on-year. It also named a new Chief Financial Officer.

People familiar with the matter said that Herbalife had bought back the stock and the deal with Mr. Icahn followed the offer to buy a large portion of its shares at a final closing price of $ 48.05. Mr Ikan took it up on the offer partly because he saw no need for additional activism in the company, he said.

Mr. Icahn sold $ 550 million of Herbalife shares, telling the Wall Street Journal in 2018, “When one position exceeds $ 1.5 billion, you sell a little.”

Write Cara Lombardo at [email protected]

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