Icahn explored selling Herbalife stake to group that included Ackman

Carl Icahn bought more shares in Herbalife Ltd. on Friday after the stock fell on a Wall Street Journal article that reported he had discussed possibly selling his stake, including in part to rival William Ackman.

It is not clear at the moment what the status of the potential sale is. Mr. Ackman had declined the offer initially, but after reconsidering he was willing to buy a few million shares out of the 17 million plus shares owned by Mr. Icahn, valued at nearly $1 billion. Ackman has a huge short position on the stock, on which he will make some profits if the stock falls by approximately half.

Currently, Icahn Carl C, owns 19.30 million shares, which accounts for 21.27% of Herbalife Ltd’s market cap.

“I think he knows that this thing is toast”, Ackman said.

Icahn was unfazed by his comments, saying that Ackman was a “young gunfighter” who “just likes pounding himself on the chest”, the Times reports. Notable investors are: Indus Capital Partners Llc, Owl Creek Asset Management L.P., Route One Investment Company L.P., Deccan Value Investors L.P., Serengeti Asset Management Lp, Icahn Carl C, Huber Capital Management Llc. Ackman for years has been betting against the company, accusing it of running a pyramid scheme.

“It’s a confidence game”, Ackman said in a Friday morning interview on CNBC, telling the cable network he agreed to buy the shares if there was no other buyer. The shares had gained about 15 percent this year through Thursday. This was obviously another misstatement of the facts by Ackman since today I bought another 2.3 million shares. The deal also capped the amount of Herbalife stock Icahn could acquire at 25 percent of the shares.

It’s not surprising that Icahn would want to sell, said Ken Shea, an analyst at Bloomberg Intelligence.

Icahn and Ackman had placed opposing bets on Los Angeles-based Herbalife. “The big positive catalyst that was out there is gone”.

Out of 2 analysts covering Herbalife (NYSE:HLF), 2 rate it a “Buy”, 0 “Sell”, while 0 “Hold”. Herbalife will now have to depend on retail sales, which are to be verified by receipts, instead of bulk purchases by members. The Company’s representative products include Formula 1 Healthy Meal, Herbal Tea Concentrate, Protein Drink Mix, Personalized Protein Powder, Total Control, Prolessa Duo, Protein Bars, Aloe Concentrate, Niteworks, Garden 7 phytonutrient supplement, Best Defense for improved immune system, COQ10 Plus and Herbalife SKIN line.