Herbalife authorizes share repurchase, quarterly dividend programs

By Lisa Kerner

Charlotte, N.C., April 19 - Herbalife Ltd.'s board of directors authorized a share repurchase program in which the company will purchase up to $300 million of Herbalife common stock during the next two years.

The board also adopted a regular quarterly cash dividend program, beginning with a $0.20 per share cash dividend for the first quarter 2007, payable on May 15 to shareholders of record on April 30.

"We have a unique distributor-driven business model that generates significant free cash flow and is not fully appreciated by the investment community," chief executive officer Michael O. Johnson said in a company news release.

"The actions of the board reinforce our belief that our shares are undervalued at current prices and that we can use excess cash to accelerate returns to investors."

In addition, Herbalife terminated the advisory services of Goldman Sachs related to the Feb. 2 unsolicited offer from Whitney V, LP to purchase all of the outstanding shares of the company at $38.00 per share. Herbalife did not believe the offer represented sufficient value for the company.

The special committee of board directors formed to review the proposal was disbanded on April 9.

Whitney V - an investor group that includes Herbalife product distributors and is reportedly the company's largest shareholder - expressed willingness to "discuss supporting a different party's transaction that was embraced by the issuer's distributors, the special committee and the board," in a recent schedule 13D filing with the Securities and Exchange Commission.

Herbalife is a global network marketing company based in Los Angeles that sells weight-management, nutritional supplements and personal care products.

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