Going Private, Herbalife to Sell for $685 Million

LOS ANGELES--Herbalife International Inc. (NASDAQ:HERBA, HERBB) entered into a definitive merger agreement with the private equity firms Stamford, Conn.-based Whitney & Co. LLC and San Francisco-based Golden Gate Capital Inc. The transaction is reported to be valued at $685 million, taking Herbalife from a publicly traded company to a private one.

As part of the agreement, holders of Class A and Class B common stock will receive $19.50 per share in cash. The day before the merger was announced (April 10), shares closed at $15.39 for Class A holders and $14.40 for Class B holders. Herbalife's charter requires that, in the event of a merger, Class B holders receive the same consideration per share as Class A holders.

"This transaction won't change the business or change the culture of the company," stated Tammy Taylor, a member of Herbalife's investor and public relations firm Sitrick and Co. "Going private will help Herbalife focus its resources on health and wellness, and the company's management and distributors will remain the same. It will be business as usual." Frank Tirelli, who was hired in January 2002, will remain president and chief executive officer of Herbalife (www.herbalife.com).

Herbalife's board of directors approved the transaction, and the merger is now subject to customary closing conditions and the approval of Class A stockholders. The merger is expected to close by late second quarter or early third quarter 2002.

This announcement was made early April 11; as of 9:44 a.m. of the same day, shares were up 24.5 percent to $19.16.