Herbalife International
Though it got little ink in the United States, L.A.-based vitamin powerhouse Herbalife International Inc. failed in an attempt to sell $250 million in high-yield bonds into the European market, in a deal handled by UBS Warburg. The proceeds were to help finance a $685 million buyout of Herbalife by two private equity firms: Stamford, Conn.-based Whitney & Co. and San Francisco-based Golden Gate Capital Inc. (Whitney is one of the nation's oldest private-equity firms.)
According to some bond, traders, UBS Warburg had cut back the offering to $165 million, and upped the yield to a juicy 12 percent, but still the buyers wouldn't be tempted. In the last three years, it's become increasingly difficult to find financing for mergers. "This is just another sign the market doesn't like buyouts or mergers anymore," said one analyst.
A Herbalife spokesman said last week that the going-private transaction, priced at $19.50 a share, will go ahead.
Evidently, the stock market thinks a deal will get done: Herbalife is still trading at $19 and change, well above the $15 it commanded before the April announcement of the going-private deal.
Herbalife International has ups and downs like any major corporation, but the fact is, Herbalife is one stable MLM company that is backed by customer support, distributor training and an excellent product.
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