Herbalife Goes Public, Plans $14-Million Stock Offering

Herbalife International has gone public by merging with a Utah-based “shell” corporation, and it plans to raise at least $14 million in a public stock offering, according to reports filed with the Securities and Exchange Commission.

The Los Angeles-based marketer of vitamins, nutritional supplements and weight-loss products was merged last week with Sage Court Ventures of Salt Lake City, according to a proxy statement and two 8-K reports filed with the SEC.

Jack Lund, director of marketing for Herbalife, said the company merged with the Utah company because it could thereby become a public corporation more quickly than by attempting to take Herbalife public with an initial stock offering. Sage Court didn’t have any operations before merging with Herbalife, Lund said.

Herbalife founder Mark R. Hughes, will become chairman of the new company, called Herbalife International, and will be issued 14.8 million of the 16.8 million outstanding shares of common stock of the new concern, according to the SEC filing.

Lawrence Thompson will serve as a director and as executive vice president and will be issued the remaining 2 million outstanding shares.

Hughes and Thompson, who own 84.3% of Herbalife following the merger, might raise an additional $6 million by selling some of their shares in the new company, according to the proxy statement.

Herbalife had $7.6 million in net income on sales of $115.7 million for the first six months of 1986. The statement didn’t include figures for the first six months of 1985.