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Icahn says Herbalife clash with Ackman isn't a 'get even'

February 15, 2013|By Andrew Tangel
  • New York hedge fund managers Bill Ackman, left, and Carl Icahn have taken huge bets on either side of Herbalife, an L.A.-based company.
New York hedge fund managers Bill Ackman, left, and Carl Icahn have taken… (Pawel Dwulit, Shiho Fukada…)

NEW YORK -- Corporate raider Carl Icahn says he did not purchase $214 million worth of Herbalife just to undermine a massive bet against the company taken by his foe and fellow financier Bill Ackman.

“I don’t like Ackman – everybody knows that. I don’t respect him -- everybody knows that," Icahn said in a phone interview on CNBC Friday morning. “As a great investor – that’s what he’s called me -- I do not buy things just to get even with anybody.”

Icahn, who disclosed in regulatory filings Thursday he had purchased a nearly 13% stake in the L.A.-based company, told the television network that Herbalife is under-valued and ripe for restructuring or going private.

Greater demand for the stock could cost investors such as Ackman, who announced a $1-billion short, or bet, against Herbalife on Dec. 20.

Icahn said that costing Ackman in a "short squeeze" is not his motive, but he wouldn't shed any tears if Ackman lost big money. The two have bad blood stemming from a business dispute years ago.

“I’m not going to lie to you and say if Ackman gets squeezed I’ll feel very sorry and go and cry and do penance," Icahn said in the interview. “But that’s not the reason that I’m doing this. I’m doing this to make money – that’s what I do. The fact that I don’t like Ackman, you could say, maybe is the strawberry, you know, on top of the ice cream.”

A regulatory filing Thursday revealed Icahn has paid $214 million for 14 million Herbalife shares and options, worth 13% of the company. Icahn had not previously disclosed whether he had a stake.

In late January, the billionaire investor squared off with Ackman, chief executive of Pershing Square Capital Management. The exchange riveted Wall Street because it was so unusual for Wall Street tycoons to telegraph their animosity.

On Dec. 20, Ackman accused Herbalife of being a pyramid scheme that defrauds distributors of its nutritional supplements and food products. Ackman has said the country would be better off if Herbalife disappeared, and he wants to take the stock to zero.

Herbalife stock got a boost from news of Icahn's stake.  After being up 12% in early trading, however, the company's shares were up $2.49, or 6.5%, to $40.76 by midday.


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