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Activist Investing · Billionaire Feud · Herbalife · Short Selling
Carl Icahn attempted to sell his 17 million-share, $1.1 billion stake in Herbalife through Jefferies, but the deal failed due to a low bid and legal restrictions, intensifying his long-standing feud with short-seller Bill Ackman.
Icahn, holding a 21% stake and five board seats, sought to unload his position after Herbalife's $200 million FTC settlement, which he publicly claimed as a victory despite the agency's clarifications. Jefferies contacted Bill Ackman, a major short-seller of Herbalife, who considered buying a portion of Icahn's shares (up to $240 million) to profit from the anticipated stock drop upon news of Icahn's exit.
However, Jefferies struggled to find buyers for the controversial company's shares, ultimately securing a bid for 11 million shares at $51.50 each, a 17% discount from market price, which Icahn rejected. The failed sale, occurring within an eight-day Rule 144 window, led to a Wall Street Journal report, prompting Ackman to publicly gloat, further escalating the bitter rivalry that began in 2003 over a $9 million judgment.
Icahn subsequently doubled down on his Herbalife position, hinting at a tender offer to buy the entire company, aiming to create a massive short squeeze against Ackman.
