Standard & Poor's Ratings Services said that its 'BB+' corporate credit rating on Los Angeles-based Herbalife Ltd. remains on CreditWatch with negative implications following the company's announcement that the company's board of directors has rejected a bid to be acquired by Whitney V L.P. The board indicated that although it views Whitney's bid as too low, it would consider an improved offer.
The company is currently carrying minimal debt leverage, but
existing debt capacity would be stretched well beyond the limits of the current ratings if a predominantly debt-funded acquisition
of the company were to transpire. Ratings on the company will
remain on CreditWatch until greater clarity around a potential LBO emerges.
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