Photographer: Patrick T. Fallon/Bloomberg

Icahn Is Seeking Approval to Own Up to 50% of Herbalife

  • Billionaire says Ackman’s short is increasingly risky
  • Herbalife may do better as a private company, Icahn says

Carl Icahn, the billionaire investor who’s acquired almost 3 million shares of Herbalife Ltd. in the past few weeks alone, wants to be able to buy even more.

Already the largest shareholder in the maker of nutritional products, Icahn said he’s asked the U.S. Federal Trade Commission for permission to buy as much as 50 percent of the company. In doing so, he reinforced his opposition to fellow billionaire Bill Ackman, who has called Herbalife’s business model a pyramid scheme.

Icahn also said at the CNBC Institutional Investor Delivering Alpha Conference Tuesday that Herbalife may be better off as a privately held company and that he would consider a tender offer. The investor has no intention of moving ahead with that now, though, he said at the event.

The remarks signal that Icahn’s ready to potentially double down on his Herbalife investment following the resolution of an FTC probe in July. He has previously reported a 21 percent stake in the Los Angeles-based company, with permission to acquire as much as 35 percent.

U.S. antitrust law requires that investors notify the FTC if they intend to increase their stake in a company substantially.

FTC Agreement

Ackman, meanwhile, maintained his bet against Herbalife even after the maker of weight-loss shakes and supplements reached a $200 million settlement with the FTC. He said that the terms of the agreement -- which Herbalife hailed as an acknowledgment that its business model was sound -- would cripple the company and cause it to collapse.

After leading a nearly four-year short-selling campaign against Herbalife, Ackman said last month that Icahn was looking to unload his stake. Icahn rebutted the claim and added to his position by buying an additional 2.3 million shares. A week later, Icahn said he bought another 306,846.

Ackman and Icahn have now spent years sparring over Herbalife. Ackman has called it a pyramid scheme since going public with a $1 billion short bet in December 2012. Herbalife has repeatedly denied Ackman’s allegations.

Icahn joined the other side of the fight in early 2013. He publicly criticized Ackman’s effort to put Herbalife out of business and became the company’s biggest investor. He also added five representatives to Herbalife’s board.

Ackman’s ‘Obsession’

“At that point, I was mad at Ackman,” Icahn said Tuesday. “I didn’t buy it because I was mad at Ackman, but I might not have read the report if it wasn’t for Ackman.” He also called Ackman “obsessed” with destroying the company.

Ackman sent Herbalife shares tumbling Aug. 26 when he said Icahn was looking to ditch his holdings. In an interview with CNBC, Ackman said investment bank Jefferies Group LLC approached him about buying a portion of Icahn’s Herbalife shares earlier in August.

Icahn acquired more of the company’s stock, and issued a statement after the market closed denying and ridiculing Ackman’s claims.

Tuesday, Icahn said he wasn’t angry at Ackman that day, adding that his rival’s claims enabled him to scoop up more shares cheaper during the trading session.

He also said on Tuesday that Ackman’s bet against Herbalife was increasingly risky, given Icahn’s rising stake and concentrated holdings by others.

‘’I’m not just playing games buying the stock,’’ Icahn said, arguing Herbalife was a real business selling real products.

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