Herbalife Ltd., the nutrition company hedge fund manager BillAckman has accused of being a pyramid scheme, boosted its sharebuyback by 50 percent to $1.5 billion and announced a $1 billionsale of convertible bonds.

Fourth-quarter earnings were probably $1.26 to $1.30 a sharebased on preliminary results, excluding some items, the companyalso said today. Analysts predicted $1.16, the average of estimatescompiled by Bloomberg. Sales rose about 20 percent.

Herbalife is rewarding shareholders after new auditorPricewaterhouseCoopers LP's examination of its books gave thecompany a clean bill of health, clearing the way for additionalborrowings to fund stock buybacks. The company's business also hasbeen growing, with 2013 marking the fourth straight year of salesgains greater than 15 percent.

“They certainly have plenty of cash flow to fund a buybackeffort, but by taking on debt that gives them the ability toaccelerate the effort,” Rommel Dionisio, a New York-based analystfor Wedbush Securities, said in a phone interview. “This gives themanother tool for taking advantage of a stock price below where theybelieve it should be trading. This is a company putting its moneywhere its mouth is, and it should be viewed as a positivemove.”

The shares gained 1.1 percent to $65.09 at 9:57 a.m. in NewYork. Herbalife more than doubled last year.

FTC Meeting

The company, which makes vitamins, skin creams, andmeal-replacement shakes and operates in more than 80 countries, hasdenied Ackman's claim. Ackman's New York-based Pershing SquareCapital Management LP initially sold short at least 20 millionHerbalife shares and had lost money on the bet as the stock morethan doubled in 2013 and investors, including billionaire CarlIcahn, backed the Cayman Islands-based company.

The initial buyers of Herbalife's notes, due in 2019, will beBank of America Corp., Credit Suisse Group AG, HSBC Holdings Plc,and Morgan Stanley, the nutrition company said today in astatement. The former buyback program of $1 billion had anavailable balance of $653 million.

For the current quarter, the company predicted a range of $1.24to $1.28 for earnings per share. Fourth-quarter results will bereleased Feb. 18.

Federal Trade Commission (FTC) Chairwoman Edith Ramirez plans tomeet with minority and consumer activists to hear concerns aboutHerbalife, the New York Post reported Feb. 2, citing Brent Wilkes,executive director of the League of Latin American Citizens.Ramirez will meet with more than a dozen activists on Feb. 5, thenewspaper said.

U.S. Senator Edward Markey, a Massachusetts Democrat, sentletters last month to the U.S. Securities and Exchange Commissionand the FTC urging the agencies to look into Herbalife's businesspractices. The announcement was a boon for Ackman, who sinceDecember 2012 has been urging regulators, elected officials, andcommunity activists to investigate the company, saying itmisrepresents sales figures, misleads distributors about potentialearnings, and sells a commodity product at inflated prices.

Last week, one of Herbalife's biggest defenders, Tim Ramey, lefthis job as an analyst for D.A. Davidson & Co. in Lake Oswego,Oregon, to join Post Holdings Inc. as director of strategicventures on a consulting basis, Post Chairman and Chief ExecutiveOfficer William Stiritz said. Stiritz is Herbalife's third-largestinvestor, with 7.4 percent of the shares as of Jan. 29, accordingto data compiled by Bloomberg.

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