Herbalife Ltd., struggling with regulatory changes that are pressuring its sales, ended talks that would have taken the the nutritional-supplement company private and simultaneously reached an agreement with billionaire investor Carl Icahn.
Icahn, who has built up his stake to become the biggest shareholder in recent years, agreed only to boost holdings past 50 percent if he bought it outright, Herbalife said Monday in a statement. He held about 24 percent of the company as of June.
Herbalife also announced a self-tender offer to buy as much as $600 million of its own shares that comes with a contingent cash payment if Herbalife is acquired in a private transaction within two years.
The moves may ease shareholders’ concerns as Herbalife makes changes imposed by the Federal Trade Commission that forced it to cut its forecasts for sales and volume last quarter. Those changes came after investor Bill Ackman publicly bet $1 billion against Herbalife’s stock more than four years ago and accused it of being an illegal pyramid scheme. Herbalife, based in Los Angeles, has repeatedly denied his allegations.
Shares of the Los Angeles-based company surged as much as 9 percent to $67.50 in early trading Monday. The stock had climbed 29 percent this year through Friday’s close.
Herbalife will pay $60 to $68 per share in the offer, which is scheduled to run through Sept. 19. Icahn and the Herbalife board and executives won’t sell their shares as part of the offer, according to the statement.