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Morning Brief: Icahn’s Herbalife Stake Rises From Buyback

The multi-level marketer got a boost after completing a previously announced stock buyback.

  • By Stephen Taub

Carl Icahn said his stake in Herbalife has climbed to 26.22 percent after the multi-level marketer of health and nutrition products completed its previously announced stock buyback. The activist investor, who did not tender any shares, still owns a little more than 22.87 million shares. Last Friday the stock popped about 11.15 percent after the company said it bought and retired more than 6.7 million shares in a “modified Dutch offer.” The stock now trades at $77.24.

Of course, Bill Ackman’s Pershing Square Capital Management, which has been asserting Herbalife is a pyramid scheme, has a significant negative bet on the stock. Pershing Square International is down 4 percent for the year through September.

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Viking Global Investors disclosed that it owns nearly 2.5 million shares of Deciphera Pharmaceuticals, or 8.1 percent of the company focused on improved kinase inhibitor treatments. It did not own any shares of the company at the end of the second quarter.

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Credit Suisse raised its price target on DowDuPont, the chemical behemoth that is the result of the September 1 merger of Dow and DuPont that was championed by activist hedge funds. In a note to clients the investment bank explains it adjusted its target price to reflect a higher sum-of-the-parts multiple resulting from the reallocation of profits to its specialty segment. At the end of the second quarter, Dow Chemical was the second largest U.S. long of Dan Loeb’s Third Point, which was Dow’s eighth-largest shareholder before the merger. DuPont was an activist target of Nelson Peltz’s Trian Fund Management.

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