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I and many others have been critical of Usana Health Sciences (NASDAQ: USNA) for a while now. Fraud fighter Barry Minkow has argued quite compellingly that the company's business model amounts to little more than a cleverly disguised pyramid scheme. How did he figure that out? He read the company's filings with the SEC.

Since Minkow's report, the stock has taken a beating: an auditor resigned, numerous credentials flaps were uncovered, the SEC opened (and closed, sadly) an investigation, and the company has repeatedly failed to meet the growth expectations of the Street.

Now founder Myron Wentz -- who owns half the stock through Gull Holdings -- is offering to take the company private at $26 per share. His reasoning? In the press release announcing the offer, Wentz explained, "Going private will provide significant cost savings and will allow USANA's talented management team, employees, and Associates to focus solely on providing industry-leading products and building USANA's strong Associate network without the pressures and distractions brought on by the public market."

Exactly! Going private will allow the company to operate its shady business model free from scrutiny. The selling of overpriced vitamins based on the promise of the potential to earn a six-figure income working from home has earned a lot of money for Usana. But having to disclose the business model in black and white has attracted the scorn of critics.

Now Usana can go back to what it does best: luring people in to a multi-level marketing business without having to disclose as much information about what a rip-off it is.

But before shareholders get too excited, they might want to take a look at Wentz's history of offering to buy the company. Back in 2002, Wentz made a similar offer (for a lot less money), but then Wentz later announced, "To allow our shareholders to benefit from any increased value, I have decided to terminate my current effort to acquire USANA's operating assets on the terms previously announced."

What a swell guy! This is starting to remind me of the whole Parlux (NASDAQ: PARL) buyout that never was fiasco.

Usana founder makes offer to take the company private - good idea! originally appeared on BloggingStocks on Tue, 13 May 2008 16:00:00 EST. Please see our terms for use of feeds.

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