Shares of Herbalife jumped Thursday after the nutritional supplement company said billionaire investor Carl Icahn will be allowed to nominate two board members.
Herbalife (HLF) shares ended the day up 7%. The stock was briefly halted on the news.
Under the terms of a deal with Icahn's holding company, Herbalife agreed to have Icahn nominate two members to the company's board, which will grow to 11 directors. The new board members will need to be approved by the company's nominating committee. The appointments will be made sometime before Herbalife's annual shareholder meeting.
In addition, Icahn now has the right to increase his stake in the company to a maximum of 25%.
Herbalife is at the center of a clash between Icahn and rival hedge fund billionaire Bill Ackman.
Back in December, Ackman called the multi-level marketing company a "massive pyramid scheme" and said he'd placed a $1 billion bet against Herbalife.
Related: Why Bill Ackman is targeting Herbalife
Icahn responded in February by announcing a 13% stake in Herbalife. He has since been a vocal supporter of the company, and an outspoken critic of Ackman.
In an interview with Bloomberg Television, Icahn said he wants to buy more shares in Herbalife, though he was unsure the current price was right. Icahn has said he is exploring strategic options for the company, including taking it private.
"Ackman has given us an opportunity to buy a company cheaply at a discounted price," Icahn said. "And for that I thank him, actually."
Icahn also reiterated that he does not like nor respect Ackman.
The rivalry played out on live TV last month, when Icahn and Ackman traded insults on CNBC.
Icahn called Ackman, among other things, a "liar," a "major loser," and a "crybaby in a schoolyard."
Ackman responded by calling Icahn a "bully" who "takes advantage of people" and "not an honest guy."
Shares of Herbalife (HLF) bounce back from a sharp drop Monday morning after the New York Post reported that the company is the subject of a federal investigation. Herbalife's stock fell nearly 13% shortly after the open but finished the day up more than 1%.
The investigation was revealed after the Federal Trade Commission disclosed a list of 192 complaints against Herbalife from the past seven years in response to a Freedom of Information Law request MOREHibah Yousuf - Feb 4, 2013 4:01 PM ET
It's Herbalife's turn.
As hedge fund titans Bill Ackman and Dan Loeb square off over the company's sales practices, the company's top executives played defense.
"We are confident that you will see that we're a legitimate company with legitimate customers," Herbalife CEO Michael Johnson told investors and analysts gathered at the Four Seasons in midtown Manhattan Thursday. Johnson called the opportunity to address the crowd "unusual but incredible."
Ackman, who runs Pershing MOREMaureen Farrell - Jan 10, 2013 10:31 AM ET
Hedge fund manager Bill Ackman outlined why he and his team of analysts have dubbed the nutritional supplement company Herbalife (HLF) as a "pyramid scheme" at a conference in New York Thursday morning.
Herbalife's stock dropped nearly 4% Thursday, its second straight day of sharp drops. The vitamin maker's stock dropped more than 12% Wednesday, after CNBC reported that Ackman had been betting against the stock for most of 2012. MOREMaureen Farrell - Dec 20, 2012 12:52 PM ET
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