Herbalife Ltd made an official announcement today, saying that it had agreed to nominate three of the people proposed by Carl Icahn to the companys board only a few days after its annual meeting. The nomination comes after the opening of a probe into Herbalife by the Federal Trade Commission, which has sent a demand for civil investigation to the company.
The federal regulators were put under pressure by Mr. Bill Ackman – a hedge-fund manager, who claimed that the company misleads distributors and called it a “pyramid scheme”.
The Chairman and Chief Executive Officer of Herbalife Ltd said in the statement, which was cited by Bloomberg: “This is a very positive agreement and we appreciate the Icahn parties’ shared confidence in Herbalife’s continued success.”
Today it became clear that Carole Black, Michael Levitt and Colombe M. Nicholas will be replaced by Hunter C. Gary, Jesse A. Lynn and James L. Nelson, who were proposed by Mr. Icahn, who owns a roughly 17% stake in Herbalife via related companies and already has two of his representatives as board members. He is currently the largest shareholder in the company, whose shares more than doubled since December 2012.
Mr. Carl Icahn said in todays statement: “We remain resolute in our commitment to the long-term success of Herbalife.” His proposition of new board members was taken into account by the company as a sign of “shared confidence”.
According to Herbalife Ltd.s statement, the official nomination of the three new members is expected to happen at the annual general meeting, which is scheduled for April 29th. Last year Mr. Icahn revealed that he had acquired a stake in Herbalife and shared that he would consider different strategies with the companys management team.
Herbalife Ltd rose by 7.25% to $53.13 per share in recent premarket trading. The company settled 2.46% lower on Friday in New York at $49.54, marking a one-year change of +29.82% and a market value of $5.02 billion. According to CNN Money, the 4 analysts offering 12-month price forecasts for Herbalife Ltd have a median target of $87.50, with a high estimate of $94.00 and a low estimate of $73.00. The median estimate represents a +76.62% increase from the last price of $49.54.
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