No one’s suing anyone or tossing around any epithets (OK, maybe just one). But it’s safe to say that the feud between Bill Ackman and Carl Icahn is back on after a two-year ceasefire, much to the chagrin of the maîtres d' certain two-Michelin-star restaurants on Central Park South. With the exception of a few trademark Ichan quips—he didn’t mean to give Ackman a hug on live TV two years ago; he merely “tripped” on the non-existent stairs in front of his seat on the stage and fell into the crybaby—there seems to have been a bit of a role reversal in the row. Now, it’s Icahn making what appear to be wildly unsupportable claims about Herbalife that seem calculated to move the markets, like that he’s considering buying all of the diet shake company, or at least half of it, $200 million FTC settlements be damned, while playing semantic games over whether telling the CEO of Jefferies to unload his entire stake in the company last month constitutes an order to sell. What is clear is that no one seems willing to buy Herbalife shares at their current price other than Carl Icahn.
On Aug. 25, Jefferies was able to put together a bid. A group of institutional investors were willing to pay $51.50 a share for more than 11 million of Icahn’s Herbalife shares, according to individuals familiar with the situation. Ackman was not part of the group.
That bid would be about 17% less than the near $62 per share Herbalife was trading at—a discount traders say is almost unheard of in such block sales. Icahn would have netted a profit of about $167 million, given that he had paid an average of $37 per share. But that would have also left Icahn holding almost 6 million shares for which he paid a little more than $200 million and vulnerable if the news of his sale did in the end cause Herbalife’s shares to fall. Icahn’s response: no deal….
Some Herbalife bulls, meanwhile, are abandoning the stock. Hedge fund manager Robert Chapman of Chapman Capital says he recently threw in the towel. “The bottom line is you know two things for sure,” says Chapman. “One, Herbalife’s U.S. business is in trouble, and two, Carl Icahn wanted to sell 17 million shares. That is enough for me.”