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Battle of the Billionaires: Icahn vs Ackman in Herbalife Debacle



Carl Icahn’s Icahn Enterprises is finally taking some profits on its Herbalife Nutrition winnings. On Friday the investor said he was lowering his stake in a securities filing.


Shares of Herbalife closed down 9.6 percent Friday.


“Yesterday IEP tendered its Herbalife shares into the Company’s self-tender offer. Of the shares we tendered, at most only 11.4 million could possibly be purchased in the tender, which would still leave us as the Company’s largest shareholder with at least 34.3 million shares,” Icahn said in a statement. “For almost six years, we have been one of Herbalife’s strongest, most loyal supporters; we stood by the Company through a half-decade long short-selling campaign; and we never sold a share, even after our investment doubled. But, given that our Herbalife investment has become an outsized position, representing approximately 24% exposure to total NAV, it is only prudent for IEP to reduce its exposure.”


The statement continued, “IEP’s investment in Herbalife is a quintessential example of our activist investment strategy.  In late 2012 and early 2013, when Herbalife was under attack and the stock was out of favor, we studied the business and assessed the risks.  At that time, we concluded the risk/reward ratio was very favorable.  We amassed a large position and joined the Board.  Our directors worked closely with management to stabilize the Company in the face of short-sellers and to guide management in their discussions with the FTC and other government officials. We are very proud of our activism at Herbalife and the value we have created for all shareholders.


“From our first Herbalife share purchase in late 2012 through yesterday, almost $7 billion of value has been created for all Herbalife shareholders. We believe Herbalife’s business is stable, the short-sellers have largely exited, and the Company is well-positioned for the future.  On behalf of all shareholders, I congratulate Michael Johnson, John DeSimone, Rich Goudis and all the other members of management, all the employees and all the distributors who have stood by, and steered, this company so effectively over the past six years.”


Herbalife is a global nutrition company whose purpose is to make the world healthier and happier. The company has been on self-proclaimed “mission for nutrition—changing people’s lives with great nutrition products and programs—since 1980.”


The company’s targeted nutrition, weight-management, energy and fitness and personal care products are available exclusively to and through its independent distributors in more than 90 countries.


Also this month, Herbalife announced the renewal of its multi-year sponsorship with International soccer star, Cristiano Ronaldo, extending their relationship that first began in 2013, to 2021. Through the sponsorship, Herbalife Nutrition will maintain the exclusive rights to promote Ronaldo in connection with the nutrition, wellness and sports performance products category.


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