Herbalife Investor Raises Stake, Evokes BuyoutTuesday, November 19, 2013
William Stiritz, the head of Midwest cereal giant Post Holdings, has increased his stake in Herbalife Ltd. to 6.4 percent, and not only wants to help grow the Los Angeles nutrition company but help defend it against hedge fund investor William Ackman.
Stiritz, who is based in Belleville, Ill. and a veteran in the consumer-packaged goods industry, began accelerating his purchase of Herbalife shares in September, according to a regulatory filing with the Securities and Exchange Commission made public Tuesday afternoon.
Forbes reported that the filing stated Stiritz plans to offer his views to Herbalife’s management with an eye toward potential financing or recapitalization strategies, and potential stock repurchases. Stiritz recently told Bloomberg that he would be willing to participate in a potential leveraged buyout of the company.
Stiritz joins a number of high-profile investors – including Carl Icahn, Daniel Loeb and George Soros – who have taken stakes Herbalife and defended the company’s business model and practices against Ackman, who sent Herbalife shares into a tailspin last December after shorting the stock and accusing the multilevel marketing company of operating a Ponzi scheme.
Stiritz the largest individual shareholder in Herbalife. Icahn Associates recently held more than 16 percent.
Herbalife stock’s have recovered since Ackman’s short, but Stiritz said in his filing that he still believes it to still be undervalued. The company “has a strong business model, a strong distribution system and a positive outlook for long-term growth opportunities, he said.
Stiritz said plans to discuss with management “potential strategies for confronting the speculative short position that currently exists in the company’s stock and its attendant negative publicity campaign.”
Herbalife shares on Tuesday closed down $1.23, or nearly 1.8 percent, to $55.97 on the New York Stock Exchange, and rose 2.8 percent in after-hours trading.
Earlier Business Journal coverage: