Herbalife: Still addicted to private equity

Posted Feb 5th 2007 2:00PM by Tom Taulli
Filed under: Private Equity

Herbalife Ltd (NYSE: HLF), which sells nutritional supplements (primarily through a network-sales model), went public in 2004. This was after the company went through a private equity buyout a couple years earlier.

Now Herbalife wants to go private again. The deal is for $38 per share, giving it a valuation of roughly $2.7 billion. The buyer is J.H. Whitney & Co., which currently owns about 27% of the outstanding shares.

However, in early January, Herbalife reported disappointing guidance. The stock got whacked by about 20%.

So, it looks like J.H. Whitney's timing is pretty good, right?

Actually, it may be too good. After all, the stock price is $39.96, which is up nearly $2 higher than the buyout offer. In other words, J.H. Whitney will probably need to bid-up some more.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Tags: Herbalife