Featured Company News - Herbalife Announces Self-Tender Offer, Seeking to Purchase up to $600 million of its Outstanding Common Shares
Research Desk Line-up: Mannatech Post Earnings Coverage
LONDON, UK / ACCESSWIRE / August 23, 2017 /Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Herbalife Ltd (NYSE: HLF), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=HLF. The Company announced on August 21, 2017, that it has commenced a "modified Dutch auction" self-tender offer to purchase for cash up to an aggregate of $600 million of shares of its common stock at a share price, not less than $60 or greater than $68. For each share tendered, shareholders will be entitled to receive a non-transferable contractual contingent value right allowing participants in the tender offer to receive a contingent cash payment, should Herbalife be acquired in a going-private transaction within 2 years of today's commencement of the tender offer. For immediate access to our complimentary reports, including today's coverage, register for free now at:
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Herbalife's Board of Directors has determined the tender offer, which includes a cash payment and a CVR for each share. The method is an appropriate one according to the Company to return capital to shareholders that seek liquidity under market conditions while, at the same time, delivering tendering shareholders potential additional value in the event Herbalife is taken private within 2 years.
Herbalife announced that it was recently in discussions with a prospective financial investor regarding a potential transaction that could have led to the Company being taken private. These conversations were formally terminated on August 16, 2017, because the discussions contemplated the possibility of the Company being taken private. The Board of Directors decided further to deliver tendering shareholders with some protection in the event the Company is taken private within two years resulting in remaining shareholders receiving a higher price that paid in the self-tender.
Herbalife recently acquired about $299 million worth of its shares under its previous $1.5 billion share repurchase plan, where the Company believes the tender offer to result in buying back additional shares at an attractive price. Subject to the tender offer, Carl Icahn, and his controlled affiliates owning Herbalife's shares, and Herbalife entered into an agreement with Icahn Entities on August 21, 2017, pursuant to which, Icahn Entities agreed among other things and for the two years following commencement of the tender offer, to not increase their aggregate beneficial ownership above 50% of Herbalife's outstanding common shares unless they have agreed to acquire 100% of its outstanding common shares.
The tender offer is not contingent upon obtaining any financing. However, the tender offer is subject to a number of other terms and conditions.
Company Growth Prospects
Herbalife announced on July 31, 2017, that it has selected Salesforce, the global leader in Customer Relationship Management to enhance distributor effectiveness and efficiency and deliver far more personalized experience to its customers. Herbalife holds access to rich customer data, where it sought an innovative technology platform to leverage the information and create a customized experience. The Salesforce platform facilitates broader social media connections to facilitate customer outreach. With the Salesforce platform, Herbalife Nutrition is set to drive customer loyalty along with lifetime value, yielding greater results for better health and wellness.
Last Close Stock Review
At the closing bell, on Tuesday, August 22, 2017, Herbalife's stock climbed 1.94%, ending the trading session at $69.36. A total volume of 2.47 million shares have exchanged hands, which was higher than the 3-month average volume of 1.18 million shares. The Company's stock price rallied 0.48% in the last three months, 14.19% in the past six months and 9.23% in the previous twelve months. Moreover, the stock soared 44.08% since the start of the year. The stock is trading at a PE ratio of 14.56 and currently, has a market cap of $6.54 billion.
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