UPDATE: Herbalife Suitor Withdraws Offer

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Nutritional supplements maker Herbalife Ltd. said late Thursday that a takeover offer from major shareholder Whitney V LP was too low, but that the company would consider a higher bid from the private equity firm.


Whitney on Friday announced it would withdraw the offer. In a letter to the board filed with the Securities and Exchange Commission, Whitney said it was “surprised and disappointed that the committee chose not to discuss the proposal with us or include the company’s distributors in its strategic review process.”


The $38-per-share offer announced in February had valued the Los Angeles company at about $2.7 billion, what was then a 15-percent premium. Whitney, whose managing director is Herbalife’s board chairman, controls about 27 percent of the company’s outstanding stock.


Since then, though, Herbalife has become one of just a handful of companies to receive a license that enables its independent distributors to sell weight loss and nutraceutical products directly to Chinese consumers rather than in a cumbersome retail arrangement. The company also scored a marketing coup with the L.A. Galaxy which recently signed British soccer star David Becham which will place the company’s logo on player uniforms.


“Herbalife’s continued momentum further reinforces the special committee’s determination that a $38 offer is too low,” said Leroy T. Barnes Jr., chairman of the board committee that evaluated the offer, in a statement.


Shares closed down $1.08, or 2.7 percent, to $39.19 on Friday.

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