SAN FRANCISCO (Reuters) - Herbalife Ltd HLF.N shares jumped 11 percent on Friday to their highest since 2014 after the company said it was buying back about 7 percent of its stock, a potential blow to activist investor Bill Ackman, who has bet against the dietary supplements seller.

Specialist trader Gregg Maloney works at the post where Herbalife is traded on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 15, 2016. REUTERS/Brendan McDermid

The annualized cost short sellers paid to borrow the multi-level marketing company’s stock jumped to 24 percent from about 2 percent earlier in the week, according to Astec Analytics.

Pershing Square Capital Management’s Ackman disclosed a $1-billion short position against Herbalife in 2012, saying the stock would crumble under regulatory scrutiny for what he has called a pyramid scheme. Herbalife has denied that claim.

Pershing Square declined to comment on Friday.

Herbalife started the tender offer in August after talks with an investor to take the company private fell through. It said on Friday that as a result of the offer, it expected to buy 6.7 million of its shares at $68 each, for a total of $458 million.

Removing those shares from the stock market would reduce the supply available for short sellers, who borrow stock from shareholders and then sell it, hoping to buy it back at a lower price and then return it to the lender.

During the time they have borrowed the stock, the short seller must pay interest, and reduced supplies of shares can lead to higher interest rates and make the short bet less attractive.

Due to speculation that Herbalife could be acquired, the tender offer included a guarantee allowing sellers to receive a cash payment should the company be acquired and go private in the next two years.

The stock jumped $7.55 to $75.25 on Friday, bringing its gain in 2017 to 56 percent.

Herbalife's stock is trading at about 13 times expected earnings, which is low compared with NU Skin Enterprises NUS.N, which direct sells personal-care products and supplements and recently traded at 18 times expected earnings.