Herbalife Chief Ups Bid to Settle

Herbalife International Inc. Chief Executive Mark Hughes said Monday that he would raise his bid by more than $20 million for the shares of his company that he doesn’t already own to settle a shareholder lawsuit over the buyout.

Investors sued Los Angeles-based Herbalife, its board and some of its executives in September in an attempt to block Hughes’ planned buyout. Hughes said then that he would buy the 46% of the Class A shares and 42% of the nonvoting Class B shares he didn’t own for $17 each, or $486 million.

Under the proposed settlement, Hughes, who is also president of the marketer of weight loss and personal-care products, would raise his bid to $17.81, or $510 million, based on the number of shares outstanding as of November.

Herbalife stock rose 63 cents to close at $14.50 on Nasdaq.

Hughes, who has the backing of Herbalife’s board, said in September that he had decided to buy out the company because he was disappointed in Herbalife’s stock performance.

Before the September announcement, which sent Herbalife shares up 60%, the shares had declined by more than two-thirds from a record $37.38 in January 1997.

The company’s shares began falling shortly after it was disclosed that Hughes had registered with the Securities and Exchange Commission to sell a fourth of his stock.

The stock rebounded after Hughes canceled his plans, but then fell again in June 1997 after the Food and Drug Administration proposed restrictions on ephedrine, which is used as a weight loss supplement.

Dissenters have until Jan. 28 to comment on the proposed settlement. If Hughes’ tender offer is extended, the deadline for comments would be Feb. 14.