Herbalife CEO Seeks to Take Firm Private
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Herbalife International Inc., which sells nutritional and weight-management products, said Monday that founder and Chief Executive Mark Hughes plans to buy all the stock he doesn’t already own for $500 million in cash.
That’s $17 a share for both Class A and B stocks, a 42% premium over Herbalife’s closing price Monday of $12 for Class A shares and an 86% premium over Class B’s $9.16. Both trade on Nasdaq.
Los Angeles-based Herbalife said it hasn’t been as well received on Wall Street as it hoped. Hughes, the company’s chairman, president and CEO, owns 54% of Class A and 58% of Class B shares, Los Angeles-based Herbalife said.
“Herbalife has not been rewarded by the public equity markets in recent periods,” Hughes said in a statement. “The conditions that may have contributed to this situation are not likely to change in the near future.”
The offer is set to expire Oct. 15, the company said. A majority of the outstanding shares over both classes must be tendered for the acquisition to pass. Herbalife’s board approved the transaction.
Last year, the company, which derives about 10% of its sales from Russia, saw its revenue decrease after the ruble was devalued. It was forced to increase its accounting reserves, resulting in a charge.
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