Herbalife Ltd. rose the most in more than a month after one of its biggest defenders left his analyst position to work for one of the company’s top shareholders.
The shares climbed 6.7 percent to $64.06 yesterday in New York, for the biggest gain since Dec. 16. Cayman Islands-based Herbalife more than doubled last year.
Tim Ramey left his job as an analyst for D.A. Davidson & Co. in Lake Oswego, Oregon, to join Post Holdings Inc. as director of strategic ventures on a consulting basis, Post Chairman and Chief Executive Officer William Stiritz said in a telephone interview. Ramey, who has criticized hedge fund manager Bill Ackman for accusing Herbalife of being a pyramid scheme, will report to Stiritz at Post. Stiritz is Herbalife’s fourth-largest investor, with 6.4 percent of the shares as of Nov. 18, according to data compiled by Bloomberg.
Stiritz said in November that he was willing to take part in a leveraged buyout of the company that would reward shareholders. Herbalife, which makes vitamins, skin creams and meal-replacement shakes and operates in more than 80 countries, has denied Ackman’s claim.
Stiritz, 79, declined to say what his intentions are as it relates to Herbalife or whether Ramey was hired to help take the nutrition company private.
Robert Chapman, founder of hedge fund Chapman Capital LLC in Manhattan Beach, California, said in a phone interview that Ramey’s status as a consultant for Stiritz may presage a buyout.
“It does seem to indicate Ramey’s involvement will be transactional,” said Chapman, who also said he took what he called a big position in Herbalife last week. “The most obvious transaction at hand would be taking Herbalife private.”
Ramey had recommended buying Herbalife shares and said they may rise to $115 in the next 12 months, the highest of seven analysts’ target prices for the company, according to data compiled by Bloomberg.
Ramey confirmed his departure in an e-mail.