Even though Herbalife said in its release Monday that the recent discussions ended without a deal to go private, Ackman may not come away unscathed.
Herbalife also announced it was commencing a tender offer for up to $600 million of stock through a “modified Dutch auction,” a process that lets Herbalife buy back a large number of shares from existing shareholders at the lowest possible price. Herbalife set a range for the self-tender of $60 to $68.
The company also said neither Icahn nor any members of the board of directors or the executive team would tender their shares.
Still, the move to self-tender could add pressure on Ackman if the shares he borrowed to sell short are subsequently “called back” in the process. If that were to happen, Ackman could be forced to buy Herbalife stock in the open market at a potentially much higher price.