July 31 (Bloomberg) -- Billionaire investor George Soros has taken a stake in Herbalife Ltd. that’s less than 5 percent of its outstanding shares, said a person with knowledge of the purchases.
The person, who asked not to be identified because the purchases haven’t been publicly disclosed, didn’t say over what period of time the investor’s Soros Fund Management LLC bought the shares. The shares climbed 9.1 percent to $65.50 at the close in New York, the biggest gain since May 20, after CNBC reported the stake earlier. The Cayman Islands-based company’s stock has almost doubled this year.
Herbalife already is the focus of a battle between hedge fund managers Bill Ackman and Carl Icahn. Ackman has sold Herbalife shares short and said the company is an illegal pyramid scheme that should be shut down, allegations the company has repeatedly denied. Icahn bought Herbalife shares after Ackman made his accusations and now is the company’s largest individual investor, with a 16 percent stake, according to data compiled by Bloomberg.
Soros Fund Management didn’t own any Herbalife shares as of March 31, according to a U.S. Securities & Exchange Commission filing. Soros doesn’t personally manage the money in the firm, which is run by Chief Investment Officer Scott Bessent.
Icahn said in an interview that while he doesn’t know if Soros has taken a stake, he hopes he has.
“It would be great if someone of George Soros’s credibility would be a large stockholder,” Icahn said. “As I’ve said in the past, Herbalife is a company with great potential.”
The Herbalife gain may further squeeze Ackman, who said today he took a stake in Air Products & Chemicals Inc.
Based on Herbalife’s closing share price today, Ackman has lost about $338 million on his bet. The estimated loss assumes Ackman put on the short position at a price of $48.58, the average between May last year, when he first shorted the stock and Dec. 18, the day before he disclosed his short position of more than 20 million shares.
Ackman hasn’t provided details of his position. He said in a statement yesterday that he still is short the company.
Ackman’s Pershing Square Capital Management LP has amassed a 9.8 percent stake in Allentown, Pennsylvania-based Air Products & Chemicals, signaling that he plans to push for change at the industrial-gas producer.
The hedge-fund firm’s stake cost about $2.05 billion and is now valued at about $2.2 billion, Ackman, 47, said today in an e-mail. Air Products, which had a market value of $22.1 billion as of yesterday, is the previously unidentified target described by Ackman in a July 8 letter to clients.
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