Bill Stiritz, chief executive officer of Post Holdings Inc. (POST), the Raisin Bran maker, boosted his holding in Herbalife Ltd. (HLF) to 6.4 percent and said he’ll seek talks with the nutrition company.
Discussions may include potential financing and share repurchase strategies, as well as ways to leverage Herbalife’s product distribution, Stiritz said in a filing yesterday. Stiritz, who previously reported a 5.3 percent stake, is Herbalife’s fifth-largest shareholder.
The investor said last week that he’s willing to take part in a leveraged buyout of the company that would reward shareholders and help Herbalife fend off allegations by hedge fund billionaire Bill Ackman, who for a year has accused it of operating an illegal pyramid scheme. Herbalife, which makes vitamins, skin creams and meal-replacement shakes and operates in more than 80 countries, has denied Ackman’s claim.
Stiritz, 79, has “analyzed the company and concluded that it has a sound business model, a strong distribution system and a positive outlook for long-term growth opportunities,” according to the filing. “The company’s market capitalization is undervalued at this time.”
Ackman’s Pershing Square Capital Management LP initially sold short at least 20 million Herbalife shares. Ackman has since reduced the equity short position in the company while maintaining his bet through options. He has urged U.S. regulators, elected officials and community activists to help shut it down.
Herbalife, based in the Cayman Islands, rose 6.5 percent to $70.24 at the close in New York. The stock has more than doubled this year.
Barb Henderson, a spokeswoman for Herbalife, declined to comment.
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