Herbalife (NYSE:HLF) commences a self-tender offer to buy up to $600M of its common stock at $60 - 68 per share. For each share tendered, investors will receive a non-transferable contractual contingent value right (CVR) that will pay out if the company is acquired in a go-private transaction within two years. The tender offer will expire on September 19 at 5:00 pm ET.
The company says it was recently in discussions with an investor (appears to be Carl Icahn) regarding a deal that could have led to the company going private. The talks ended on August 16.
CFO John DeSimone says, “Our Board and management team are committed to enhancing shareholder value and we believe today’s action is just one more step in meeting this goal. We have already acquired during 2017 approximately $299 million of our shares on the open market under our current $1.5 billion share repurchase plan, and we believe this tender offer provides us an efficient way to buy back additional shares at an attractive price.”
In connection with the tender offer, the company inked an agreement with Mr. Icahn under which he (and his affiliates) agreed not to increase his ownership above 50% unless he goes all in and acquires 100%.
Shares are up 8% premarket.