Icahn Gets Two Seats on Herbalife Board

by Christopher Freeburn | March 1, 2013 9:45 am

Icahn 106352500 200x300 Icahn Gets Two Seats on Herbalife Board[1]On Thursday embattled dietary supplement maker Herbalife (NYSE:HLF[2]) said that it will expand its board from nine to eleven members to accommodate two new members chosen by Carl Icahn[3].

The move comes weeks after the billionaire investor announced that he had acquired a 13.6% stake in the company. Under the deal to add the new board members, Icahn can raise his stake in Herbalife to 25%, the Associated Press noted.

Icahn’s growing investment in Herbalife comes after hedge fund manager Bill Ackman denounced the company[4] as a “pyramid scheme” in December. Icahn criticized Ackman’s comments and the two clashed during a January appearance on CNBC television.

Ackman has taken a “short” position in Herbalife[5]. If the company’s share prices rise significantly, that position would be endangered.

In January, media reports revealed that the company is the target of a probe by federal regulators[6], who have received 192 complaints by former distributors.

Herbalife shares rose fractionally in Friday morning trading.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2010/11/Icahn_106352500.gif
  2. HLF: http://studio-5.financialcontent.com/investplace/quote?Symbol=HLF
  3. accommodate two new members chosen by Carl Icahn: http://www.washingtonpost.com/business/herbalife-says-icahn-will-nominate-to-new-directors-to-company-board-option-to-increase-stake/2013/02/28/1f8a1be0-81e0-11e2-a671-0307392de8de_story.html
  4. denounced the company: http://investorplace.com/2012/12/ackman-blasts-herbalife-as-a-pyramid-scheme/
  5. taken a “short” position in Herbalife: http://investorplace.com/2013/02/herbalife-a-4-billion-ego-soaked-cockfight/
  6. is the target of a probe by federal regulators: http://investorplace.com/2013/02/herbalife-shares-fall-on-report-of-ftc-probe/

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