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Carl Icahn Sells $600 Million of Herbalife Stock

The sale leaves Icahn with a roughly 6% stake in the company, worth $400 million.

Activist investor Carl Icahn has sold over half of his stake in health supplement maker Herbalife Nutrition  (HLF) - Get Report back to the company, but Icahn still maintained the company's "products and business opportunity are needed now more than ever."

Shares of Los Angeles-based Herbalife Nutrition at last check were up 3% to $49.49, while Icahn's New York-based Icahn Enterprises  (IEP) - Get Report were up 3.03% to $52.21.

Herbalife said in a statement on Sunday it will buy back $600 million of the company's shares owned by Icahn and his affiliates at $48.05 per share.

The sale leaves Icahn with about 8 million common shares, representing a roughly 6% stake in the company worth $400 million. Since his holdings will go below the level stipulated in an agreement Icahn has with the company, he will also give up the five board seats currently held by his representatives.

Icahn is estimated to have made well over $1 billion on the investment, the Wall Street Journal reported. The transaction is expected to close no later than Thursday.

The purchase of the shares will be funded from Herbalife Nutrition’s cash on hand and existing credit facility.

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Icahn has been Herbalife's largest shareholder since 2013.

"At the time, I believed the Company was in need of an activist and that certainly turned out to be correct," Icahn said on Sunday. "Yet, the time for activism has passed as the company has grown, and I don’t typically invest billions of dollars in companies where our role as activist is not needed."

Icahn added that "Herbalife Nutrition’s products and business opportunity are needed now more than ever, and I look forward to remaining a shareholder of the company."

Icahn first bought into the stock in late 2012. The investment represented a challenge to rival investor William Ackman, who had bet against the company and publicly crusaded against its business model, which relies on a network of distributors, calling it a pyramid scheme. 

The company has said it is a legal multi-level-marketing organization and fought Ackman at every turn.

In August, Icahn Enterprises sold about 14.7 million shares of his stake in Herbalife Nutrition, trimming his stake in the company to 15.5%.