NEW YORK (TheStreet) --Jefferies contacted Pershing Square Capital Management CEO Bill Ackman earlier this month because billionaire investor Carl Icahn was looking to sell his 18% stake in global nutrition company Herbalife. (HLF) The stake is worth about $1 billion, Ackman told CNBC's "Squawk Box" on Friday morning.
Ackman, who has said Herbalife is a pyramid scheme, refused at first but later said that he would consider buying "a few million" shares if Jefferies could find a block of buyers, he told CNBC's Kate Kelly. If the firm found enough buyers, Ackman would have sold his shares the day after buying them.
If Icahn can sell off his stake in Herbalife, then people will lose confidence in the company, thus helping Ackman's campaign against it. "If Carl sells I think it will accelerate the demise of the company," he said.
This is a good time for Icahn to pull out because he's made "a bunch of money" off his stake, but he also knows that "this thing is toast," Ackman explained.
While Ackman could lose an estimated $30 million if he buys up a few million of Icahn's Herbalife shares, he says it's worth it. "I would spend $30 million to get Carl out. I would probably spend more," Ackman said.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
TheStreet Ratings team rates Herbalife as a Hold with a ratings score of C. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks.
You can view the full analysis from the report here: HLF