Herbalife Announces Share Buyback, Icahn Deal After Halting Take-private Talks

(RTTNews) - Herbalife Ltd. (HLF) announced a self-tender offer and it was recently in discussions with a prospective financial investor regarding a potential transaction that could have led to the Company being taken private.

HLF is currently trading at $67.55, up $5.60 or 9.04 percent.

Herbalife has commenced a "modified Dutch auction" self-tender offer to purchase for cash up to an aggregate of $600 million of shares of its common stock at a per share price not less than $60.00 nor greater than $68.00. For each share tendered, shareholders will also receive a non-transferable contractual contingent value right or "CVR" allowing participants in the tender offer to receive a contingent cash payment should Herbalife be acquired in a going-private transaction within two years of today's commencement of the tender offer.

The tender offer is scheduled to expire on September 19, 2017, unless the offer is extended.

Herbalife said its board has determined the tender offer is an appropriate way to return capital to shareholders that seek liquidity under current market conditions while, at the same time, providing such tendering shareholders potential additional value in the event Herbalife is taken private within two years.

Herbalife said, " the Company was recently in discussions with a prospective financial investor regarding a potential transaction that could have led to the Company being taken private. While these conversations were formally terminated on August 16, 2017, because these discussions contemplated the possibility of the Company being taken private, the Board of Directors decided to provide tendering shareholders with some protection in the event the Company is taken private within two years resulting in remaining shareholders possibly receiving a higher price than paid in the self-tender."

Under the tender offer, Carl Icahn and his controlled affiliates that own Herbalife shares and Herbalife entered into an agreement with the Icahn Entities on August 21, 2017 pursuant to which the Icahn Entities agreed, among other things and for the two years following commencement of the tender offer, to not increase their aggregate beneficial ownership above 50% of Herbalife's outstanding common shares unless they have agreed to acquire 100% of its outstanding common shares.

Herbalife noted that members of the Board of Directors, Herbalife executive officers and Carl Icahn, the Company's largest shareholder, have all advised that they do not intend to tender shares into this tender offer.