Carl Icahn may find it difficult to find a buyer for Hain Celestial Group despite speculation that the activist investor plans to push for a sale of the company.
“I know there is not a lot of interest from [peers] to buy the whole company,” said one source, adding that Hain is trading at too high a multiple to attract private-equity firms.
Icahn has been snapping up shares of Hain — the maker of Celestial Seasonings teas, Arrowhead Mills cereals and Rice and Soy dream drinks — giving him more than a 15 percent stake.
Icahn has been steadily adding to his stake since September, according to the Wall Street Journal, prompting speculation that he will try to shake up the company through a sale or other strategic changes.
The shares have risen almost 50 percent since Icahn started building his stake almost a year ago.
The stock closed down 1.9 percent yesterday to $26.35, with the company valued at around $1.39 billion.
Rather than sell the entire company, Hain may move to unload pieces, the source said.
Among peers, there is interest in the personal-care division that houses the Alba, Avalon and Jason brands, as well as the snack foods unit that includes Garden of Eatin’, Bearitos and Terra Chips.
The two divisions represent about 35 percent of Hain’s portfolio, which is focused on natural and organic products, and could be sold for high multiples, the source said.
In July, Icahn reached an agreement with Hain in which he got two of his nominees on the company’s board: his son, Brett Icahn, and Icahn Capital LP managing director David Schechter. In return, Icahn agreed to approve Hain’s slate of directors.
The company also agreed not to enact any rights agreement or “poison pill” as long as Icahn owns less than 20 percent. Icahn could also push Hain to borrow more money for a stock buyback.