(By Balachander) Herbalife Ltd. (NYSE: HLF), a nutritional supplements company, has agreed with Carl Icahn to increase the size of its board and nominate two representatives chosen by the activist investor.
HLF shares, which have been trading in the 52-week range of $24.24 to $73.00, jumped 6.73 percent to trade at $39.96 at 3.03 pm ET on Thursday.
Under the terms of the agreement, Herbalife will increase the size of its board to eleven members from nine.
Earlier this month , Icahn reported a 13.6 percent stake in the company. Icahn, who along with his affiliates own a total of about 14 million shares of Herbalife, said he acquired the shares as he believed that they were undervalued.
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Icahn has the right to increase stake in Herbalife up to 25 percent.
"Over its long history, Herbalife has proven its ability to increase revenues and returns, and we will work with the Company to build on its results," Icahn said on Thursday.
The company has been the subject of a big battle hedge-fund manager Bill Ackman, who had late last year said the company is a pyramid scheme and disclosed he is shorting the stock.
In January, Daniel Loeb's Third Point disclosed a 8 percent stake in Herbalife.
Herbalife sells weight management, nutritional supplement, sports and fitness, and personal care products.