by Christopher Freeburn | March 1, 2013 9:45 am
On Thursday embattled dietary supplement maker Herbalife (NYSE:HLF) said that it will expand its board from nine to eleven members to accommodate two new members chosen by Carl Icahn.
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 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. 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, who have received 192 complaints by former distributors.
Herbalife shares rose fractionally in Friday morning trading.
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