Herbalife Ltd. (HLF), the nutrition company at the center of a battle between hedge-fund managers Bill Ackman and Carl Icahn, said a Nielsen survey shows about 7.9 million U.S. adults purchased its products for personal use in the past three months.
The online survey of more than 10,000 people was conducted in April and May and found 3.3 percent of respondents had bought a product for their own consumption, the Cayman Islands-based company said yesterday in a statement. That indicates that Herbalife currently has almost 8 million customers when projected to the total U.S. adult population, the company said.
“This survey, conducted by one of the world’s most respected research organizations, confirms what we at Herbalife already know to be true: that Herbalife’s products have a broad consumer base here in the U.S.,” Herbalife Chief Executive Officer Michael Johnson, said in the statement. “The results of this study substantiate our belief that many of those who attack our model lack a clear understanding of the direct selling industry, and Herbalife in particular.”
Herbalife has fought accusations from Ackman, founder of New York-based Pershing Square Capital Management LP, that it’s a pyramid scheme. The company has repeatedly denied the allegations, saying it derives its profits from the sale of unique products. Shareholders have added two directors associated with Icahn, who has come to Herbalife’s defense.
Herbalife rose 6 percent to $45.98 at 11:03 a.m. in New York. The shares advanced 32 percent this year before today, compared with a 14 percent gain for the Standard & Poor’s 500 Index.
The Herbalife-funded survey was conducted without interference from the company, it said in the statement. The results include company distributors, who total about 550,000 in the U.S., Herbalife said. The margin of error was about 1 percent.
Of the 349 survey respondents who said they had purchased for personal use, 87 percent said they didn’t buy as a distributor themselves, according to the statement. Most bought weight-management products, Herbalife said.
The company also said it hired a former Novartis International AG market researcher, Monica Wood, as vice president of consumer and distributor insights.
Icahn has a stake of 16.5 percent in Herbalife, according to data compiled by Bloomberg, and has said he will seek talks with the company about strategic alternatives, including taking it private.
His stake pits him against Ackman, who has sold short 20 million shares of Herbalife after conducting research that convinced him the company was operating a pyramid scheme and that regulators should shut it down. Ackman has said the company generates most of its revenue from recruiting and uses its products to mask that fact.
Ackman didn’t immediately respond to a request for comment after regular business hours.
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