Activist investor Carl Icahn has decided to sell over half of his stake in Herbalife Nutrition. The biggest shareholder of Herbalife also gives up five board seats in the company with the significantly decreasing stake. Icahn further elaborates the reason for the decision.
Carl Icahn has been the biggest shareholder since 2013. According to Reuters, Icahn owned 15.5% stake in Herbalife as of September last year. Icahn Enterprise will soon be left with around 6% of Herbalife stake worth of $400 million after selling $600 million of the stake back to the company. Herbalife itself has agreed to buy the stake at $48.5 a share. Both firms expect to close the deal by the 7th of January.
Carl Icahn gives up board seats along with Herbalife stake
Back in 2014, Icahn Enterprise and Herbalife made a support agreement. In the deal, Herbalife will assign five board seats to Icahn Enterprise for owning at least 14 million of the multi-level marketing company stake. Icahn Enterprise will need to let go of the position since the firm will no longer correspond with the complied agreement. Accordingly, Reuters reported that Herbalife has terminated the agreement. Board representatives of Icahn Enterprise have also stepped down from Herbalife.
The reason behind
Upon the issue, Icahn said that Herbalife’s growth has passed the needs of an activist. Quoted from Reuters, Icahn revealed, “at the time (when he started investing in Herbalife), I believed the company was in need of an activist and that certainly turned out to be correct.” Upon time, Herbalife has significantly grown. “I don’t typically invest billions of dollars in companies where our role as activist is not needed,” Icahn added.
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