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USANA appears to be now be facing a second lawsuit in response to its proposal to take the company private.

Max Silberman, a shareholder who lives in Ohio is accusing the family of Myron Wentz of undervaluing the company’s stock. Silberman feels that the $26 per share offer greatly underestimates the value of the stock as well as future value of the company. The suit also claims that the Wentz family is concealing information about the true value of the stock and the company.

The purpose of the suit, is to halt the further purchase of shares by the Wentz family, who currently own 68% of the nutritional supplement company.

Silberman is hoping to get the suit -class action status so that it can represent all of the remaining minority shareholders. A previous and similar lawsuit filed by two other shareholders is currently pending in the 3rd district court. That suit too, alleges that the Wentz family is not being forthcoming about the current or future value of the company and is undervaluing the stock. The previous suit is also looking to gain class action status.

Neither USANA nor the Wentz family has released any comments about either lawsuit. The Wentz family remains firm with their offer of $26 even though that number has been unanimously rejected by a committee hired by the board to review the offer. Not only is the Wentz family standing firm on that number, they even made the same offer twice.

The Wentz family’s goal to take the company private in order to eliminate having to deal with legal issues and lawsuits seems to be backfiring. They seem to be causing more harm then good for themselves not only by making a ‘low ball” offer, but by making the same offer twice. Now, instead of re-evaluating their offer, and raising the bid, they’ve made the remaining shareholders so angry, that they now have two new lawsuits on their hands; two lawsuits that within the week could become class-action suits. Maybe the family should take a look at the company and the stock, which has been doing fairly well, and review their original goals when they decided to go private. Just so people are aware, it is not uncommon to see these types of lawsuits pop up. Shareholders who dispute either valuations or when a stock suddenly drops significantly will start these actions in an effort to get others to jump on board. At the end of the day, they typically serve as more of a distraction than anything else - something USANA doesn’t need more of right now.

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Looks like there might be some trouble with the USANA buy out offer. Apparently the cause of the melt down is a low ball offer.

A special committee selected by the board, had been evaluating the offer made by USANA founder, CEO and chairman of the board, Myron Wentz, for several weeks now and have recommended that the remaining shareholders reject the $26 a share offer.

The offer was made a month ago by Wentz, family members and other stockholders who together control 68% percent of the stock. The committee felt that the offer was not in the best interest of the remaining shareholders and greatly undervalued the shares. The committee also felt that the offer did not represent the values and the future goals of the company.

The committee released a statement via filing with the SEC saying, “The special committee unanimously determined that the offer is inadequate and not in the best interests of the shareholders of the company [other than the offer participants],”

The committee met with the Wentz group after it unanimously voted to reject the offer and according the SEC documents, the Wentz group was not willing to increase the offer price.

Wentz and his group were hoping to take the nutritional products company private so that the company could focus on business and not on legal and regulatory issues that public company’s are subjected to. The group had planned on borrowing up to $215 million to help finance the deal.

USANA stock closed at $28.34 on Friday. The buyout price of $26 a share is almost a 50% discount to the high trading price for the 52 week period ending June 18th. There is no question the offer price is going to have to be much closer to $35 a share to make this remotely possible. The problem that USANA is going to have (and may be dealing with today) is that the Private Equity money is being tightly held and deals like this are becoming harder and harder to finance.

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USANA was a big winner this past week at the American Business Awards, or the “Stevie” awards. The prestigious honor is called the “Oscars” of the business world. The American Business Awards and are a big deal in the corporate world and USANA was proud to be included amongst the nominees and take home a prize.

USANA received the award in the Interactive Multimedia Category for Consumer Entertainment/Information. The nutritional company’s MyHealthPak Builder Flash site is what won the award for the company.

USANA won the Stevie along with multimedia company, Verite who helped USANA in the designing and launching of the site. Verite helped USANA build the site which includes a custom supplement ordering system. The interactive site allows each consumer to customize and design their personalized health packs.

“We are so pleased that Verite and USANA were given the consumer entertainment award,” Verite CEO Kimberley Jones said. “Together we produced a unique, cutting-edge approach implementing Web 2.0 strategies that allowed customers to participate and personify their experience.” Dan Macuga, USANA vice president of network development and public relations, added, “We appreciate this significant recognition for the innovative MyHealthPak site. Verite helped create a simple, interactive site for our customers to receive truly customizable nutrition, helping USANA stay in the forefront of supplementation. We are also grateful for our dedicated Associates, who provided excellent feedback and support during the site’s construction.”

This award is a huge honor and for an MLM company to receive the honor brings a lot of legitimacy to the industry. With all the bad news and lawsuits in the MLM world lately, its great that a company is getting recognized for achievements rather than for what they are doing wrong. For a full list of Stevie winners, you can check out the site.

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In the latest breaking USANA news, the majority owners of USANA Health Sciences have decided that they will borrow up to $215 million from a specialty finance company to buy out other stockholders and take the Utah based health and wellness company private.

The owners feel that taking the company private will allow them to focus on the actual business instead of spending time and money fighting lawsuits and frivolous allegations. In recent years, USANA has been plagued with a series of legal problems and accusations from various parties who have made claims of shady business practices. The owners submitted filing Monday morning with the SEC of their intentions to go private.

In the filing Monday, details of the buyout offer were released to stockholders. The filings were submitted by both Usana and Unity Acquisition Corp, which was recently formed in Utah to acquire USANA. Myron Wentz, the CEO of USANA, as well as majority stockholder with 56% percent ownerships also controls Unity Acquisition Corp. Wentz and his family members along with other stockholders who together own almost 70% percent of the company have made an offer of $26 dollar per share to the remaining stockholders.

To help finance the purchase, Unity Acquisition Corp says that have secured up to $215 million from Ableco Finance LLC of New York. Ableco Finance invests in leveraged buyouts and industry consolidations as well as bridge loans, recapitalizations, refinancing and debt restructuring..

According to an agreement between USANA and Ableco, the company will pay an interest of at least 14% percent per year. The loans are secured by all existing and future assets of Usana as well as stock in the company.

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