Is Herbalife Going Private?

Herbalife Ltd. has commenced a “modified Dutch auction” self-tender offer to purchase for cash up to an aggregate of $600 million of shares of its common stock at a per share price not less than $60.00 nor greater than $68.00. For each share tendered, shareholders will also receive a non-transferable contractual contingent value right allowing participants in the tender offer to receive a contingent cash payment should Herbalife be acquired in a going-private transaction within two years of today's commencement of the tender offer.

Specifically, the Happi Top 50 company was recently in discussions with a prospective financial investor regarding a potential transaction that could have led it being taken private. While these conversations were formally terminated on Aug. 16, 2017, because these discussions contemplated the possibility of the company being taken private, the Board of Directors decided to provide tendering shareholders with some protection in the event the Company is taken private within two years resulting in remaining shareholders possibly receiving a higher price than paid in the self-tender.

The closing price of Herbalife's common shares on the New York Stock Exchange on Aug. 18, 2017, the last full trading day before the commencement of the tender offer, was $61.95 per share. The tender offer is scheduled to expire at 5pm, New York City time, on Sept. 19, 2017, unless the offer is extended.