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O.C. BUSINESS PLUS's Bid for Herbalife Stake Fails

Deals: The diet firm's majority owner rejects the Irvine company's $172.7-million offer.

September 27, 2000|From Times staff and wire reports

The majority shareholder in Herbalife International Inc. on Tuesday rejected a $172.7-million offer by Inc. to buy its shares of the Los Angeles dietary products distributor.

Less than 24 hours after the buyout bid was made public, the Mark Hughes Family Trust said in a press release that "various factors led to the conclusion that the proposal did not warrant discussion or negotiation."

Herbalife spokesman Robert Jaffe said he did not know what the factors were. Jeff Miles, spokesman for in Irvine, said he was unaware of the offer's rejection and had no immediate comment.

The small money-losing electronic-commerce company had said it had a commitment from a Cayman Islands company called Marathon Corp. to provide $210 million in financing for acquisitions.

Late Monday, Rbid said it had offered to pay $10.25 a share in cash for the trust's 5.95 million Class A common shares and $9.50 a share for its 11.8 million Class B common shares.

Hughes, Herbalife's founder and former chief executive, was found dead May 21 after what the Los Angeles coroner said was a four-day drinking binge.

Rbid's offer faced overwhelming obstacles.

Herbalife has operations in 49 nations and earned $23.3 million in the first six months on sales of $900 million. It had cash and marketable securities of $110 million at the end of June. lost $1.1 million in the first half on sales of $2 million. It was overdrawn at the bank by $186,829 on June 30, according to its most recent quarterly report filed with the Securities and Exchange Commission.

Herbalife's Class A shares fell 6 cents Tuesday to close at $9.25 each, and Class B shares fell 19 cents to $8.75 each in Nasdaq trading. gained 1 cent to close at $1.60 in over-the-counter trading.

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