If it ever looks like I’m trying to tell you what Carl Icahn is up to with Herbalife, don’t listen to me. I have no idea. How could you? Icahn now owns ~13% of Herbalife’s stock with a ~$36 basis, and he is somewhat constrained from selling it in the next six months by short-swing profit rules. So he can’t sell. He can buy, of course. But after today he can’t buy more than 25%:
Herbalife today announced that it has reached an agreement with Carl C. Icahn …. As part of the agreement, Herbalife will increase the size of its Board of Directors from nine to eleven members immediately before the 2013 Annual General Meeting of Shareholders [and] will nominate two individuals to the Company’s Board of Directors, designated by the Icahn Parties and approved by the Company’s Nominating and Corporate Governance Committee.
Under the terms of the agreement, the Icahn Parties have agreed to, among other things, abide by certain standstill provisions and vote their shares in support of all of the Board’s director nominees. The Icahn Parties have the right to increase the size of their ownership position in Herbalife up to 25% of the outstanding common stock.
The standstill is for real; Icahn filed the agreement with his 13D/A and it’s an amusingly strong-form standstill that prohibits him from buying more than 25% of the stock, launching a tender offer, proposing a merger, ” encourag[ing] or facilitat[ing]” anyone else doing the same, or, my favorite, “request[ing] that the Company or any Representative of the Company, directly or indirectly, amend or waive any provision of this [standstill] (including this clause (g) [the one that says he can't ask]).” He can’t even ask to be allowed to ask to buy Herbalife!1 Read more »
Bloomberg: Do you think he’s made a mistake on this one? Icahn: Well, if you look at his record lately, he has made a few very big mistakes. I am not going to say just this one. I am not here to question Ackman. I do not want to get pulled into that again…I look at it as a great opportunity. Ironically, I thank him for giving it to me. Does not mean I like him…I do not respect him. I do not like him. [BloombergTV, earlier]
Earlier today it was noted that, to the surprise of many, Bill Ackman and Carl Icahn had refrained from asking questions or dialing in and making sudden outbursts during this morning’s conference call to discuss Herbalife’s fourth quarter earnings. Obviously this came as a shock on account of Ackman and Icahn taking many opportunities in the past to share their feelings re: the company and each other. And while it’s true both men personally held their tongue’s today, according to Pershing Square, one of its analysts had planned to ask questions on Bill’s and the hedge fund’s behalf but was shot down. Read more »
Dueling billionaire investors Carl Icahn and William Ackman, who have gone toe-to-toe in a battle over the legitimacy of Herbalife Ltd., were silent Wednesday as the nutritional-supplements maker held a conference call to discuss its better-than-expected fourth-quarter earnings. Mr. Ackman has bet against the company’s shares, setting up a more than $1 billion short position accompanied by a high-profile campaign questioning Herbalife’s business and calling its distribution model a “pyramid scheme.” Mr. Icahn, meanwhile, has taken a 13% stake in the company and said he intends to discuss potential strategic alternatives with the company, which he insists has significant growth potential. The battle has played out in the public eye, notably when the two men sparred last month in a televised war of words on business news network CNBC…Neither Mr. Ackman nor Mr. Icahn spoke on the call. A spokeswoman for Mr. Ackman’s firm declined to immediately comment on the matter. A spokeswoman for Mr. Icahn said he was unavailable to comment. [WSJ, related, related]
Carl Icahn Won’t Say That He Bought Herbalife Just To Spite Ackman But If You’re Going to Write That, Let’s Just Say He Isn’t Going to Call You Asking For a CorrectionBy Bess Levin
“Look, I’m in this to make money. That’s what I do. The fact that it might hurt Ackman, I’m not going to run and cry and do penance. You might like to say that it’s the strawberry on top for me, that’s up to you.” [Barron's, related, earlier]