UPDATE 1-Icahn buys 14 mln shares in Herbalife, eyes options for company

Thu Feb 14, 2013 6:44pm EST

By Svea Herbst-Bayliss

NEW YORK Feb 14 (Reuters) - Carl Icahn on Thursday put his money where his mouth is.

The billionaire investor said in a regulatory filing that he owns 14 million shares, or 13 percent, of weight-loss and vitamin company Herbalife Ltd. and signaled that he is ready to help put the company in play.

After weeks of speculation over exactly what the famed corporate raider might be doing, Icahn spoke up and put himself on a collision course with William Ackman, a rival activist investor who called Herbalife a house of cards and said he sees the share price going to zero.

The two men famously tussled on cable television in late January when Icahn called Ackman a "major loser" and warned him of trouble ahead in the form of a major short squeeze.

Herbalife's share price surged 20.6 percent in the wake of Icahn's filing, trading at $46.15 after the market closed.

Icahn said he wants to meet with Herbalife's management "regarding the business and strategic alternatives to enhance shareholder value, such as a recapitalization or a going-private transaction."

The company said: "We welcome all parties who see the same value in Herbalife that we do."

One short squeeze has already occurred, experts said.

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California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

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