Carl Icahn To Get Three More Board Seats at Herbalife Ltd. (HLF)

Carl Icahn and Herbalife Ltd. (NYSE:HLF) have strengthened their ties, with the company having agreed to offer Icahn more board seats. According to an amended filing with the Securities and Exchange Commission, Herbalife will put up for election three representatives of Icahn: Hunter Gary, Jesse Lynn, and James Nelson. Mr Gary and Mr Lynn are candidates for Class I directors, while Mr. Nelson is to be elected as Class II director. The election will take place at the company’s 2014 Annual Shareholders’ Meeting, scheduled for April 29. This new agreement will give Carl Icahn 5 board seats out of the total number of 13 seats. Following the announcement, the shares of Herbalife have jumped as much as 9% and are currently trading at $53.50 apiece.

Carl Icahn and his fund Icahn Capital LP, together with its subsidiaries, hold an aggregate of 16.9 million shares of Herbalife Ltd. (NYSE:HLF), which accounts for approximately 16.8% of the company’s common stock. The fund’s stake is valued at $1.33 billion, according to its latest 13F report. Carl Icahn retains his option to increase his fund’s stake in Herbalife up to 25% of the common stock of the company.

Another hedge fund guru heavily invested in Herbalife Ltd. (NYSE:HLF) is George Soros. The legendary investor currently holds 3.2 million shares valued at $252 million, having decreased his fund’s position by a third during the previous quarter. Steven Richman is also keeping and eye on the stock, with his fund, East Side Capital (RR Partners) owning a little over 3 million shares valued at $237 million. Richman has not made any changes to his position during Q4 of 2013.

A nutrition company with global presence, Herbalife Ltd. (NYSE:HLF) has a market cap of $5.39 billion and pays an annual dividend of $1.20, which represents a yield of 2.4%. So far this year, the stock has been in a downtrend, falling 32% to a current price of $53.50. It is traded at a Price to Earnings (P/E) ratio of 10.xx, almost half the industry average of 19.60. For the three months ending December 31, 2013, the company posted revenues of $1.26 billion and earnings of $1.16 per share. Analysts expect Herbalife to register revenues of $1.23 billion and EPS of $1.29 for the current quarter.

Disclosure: none.

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