Herbalife says recently held talks about a deal to take the firm private, launches share tender offer.

Herbalife Ltd. (NYSE:HLF) saw its shares jump 8% higher in pre-market trading after the health products distributor confirmed it recently held talks about a transaction to take the firm private and said it is to launch a share tender offer.

The NYSE-listed firm said the talks with an unnamed prospective financial investor anout taking the company private have now ended.

In a statement, Herbalife said:”While these conversations were formally terminated on August 16, 2017, because these discussions contemplated the possibility of the Company being taken private, the Board of Directors decided to provide tendering shareholders with some protection in the event the Company is taken private within two years resulting in remaining shareholders possibly receiving a higher price than paid in the self-tender.”

The group added that it has commenced a modified Dutch auction self-tender offer to buy up to US$600mln of its own shares for cash.

Shareholders who tender their shares will be paid no less than US$60 a share and no more than US$68, and will receive a contingency value right as part of the deal which would give them the right to a contingent cash payment if the company is taken private.

The company said, in connection with the tender offer, that investor Carl Icahn has agreed not to increase his stake in the company above 50% unless he has agreed to buy 100% of the shares. Icahn will not be participating in the tender offer.

In pre-market trading, Herbalife shares – which have gained 29% in the year to date, were 8.2% higher at US$67.

Story by ProactiveInvestors