Herbalife Ltd. announced an agreement with billionaire investor Carl Icahn, who owns more than 13% of Herbalife's stock, that will allow him to add two members to its board and give him the right to increase his holdings to one-quarter of the company’s shares.
Trading in the company’s stock was halted in advance of Thursday’s announcement, then took off after the freeze was lifted. Herbalife shares were up $2.19, or 5.8%, at 37.44 Thursday morning.
“We are pleased to have reached this agreement and look forward to working with the Icahn representatives as members of our board of directors,” Herbalife Chairman and Chief Executive Michael O. Johnson said in a statement. “We appreciate the Icahn parties’ shared views on the inherent value of Herbalife’s operations, products and future prospects.”
The agreement amplified a high-profile struggle between Icahn and hedge fund manager Bill Ackman, who accused Los Angeles-based Herbalife in December of operating a fraudulent pyramid scheme and took a $1-billion short against its shares. The two engaged in a spirited debate about Herbalife on live television a few weeks ago.