GNC sale to stall as suit­ors es­chew US op­er­a­tions


GNC Hold­ings Inc’s talks on a po­ten­tial sale have stalled fol­low­ing dis­agree­ments over the struc­ture of a deal for the US vitamin and sup­ple­ment brand, sources said.

The Pitts­burgh-based re­tailer had held dis­cus­sions with sev­eral Chi­nese suit­ors about a sale of the en­tire com­pany, the sources said, ask­ing not to be iden­ti­fied as the in­for­ma­tion is pri­vate.

The Chi­nese firms ex­pressed in­ter­est only in buy­ing GNC’s Asian busi­ness and did not want to take over its net­work of more than 6,700 re­tail out­lets in the United States, ac­cord­ing to the sources.

GNC told in­ter­ested par­ties that it was un­will­ing to carve out its Asian op­er­a­tions and thereby lose ac­cess to a key growth mar­ket, they said. GNC shares have plunged 53 per­cent this year, giv­ing the com­pany a mar­ket value of $988 mil­lion.

Last month, the vitamin and sup­ple­ment chain re­ported third-quar­ter sales of $628 mil­lion, be­low an­a­lysts’ es­ti­mates of $651.3 mil­lion.

In­terim Chief Ex­ec­u­tive Of­fi­cer Robert Moran said on a con­fer­ence call the com­pany’s fi­nan­cial re­sults con­tinue to be “un­ac­cept­able” and pledged to im­prove the in-store ex­pe­ri­ence to win back cus­tomer trust.

GNC was gaug­ing in­ter­est from po­ten­tial buy­ers but hadn’t started a for­mal auc­tion process.

The com­pany said in May it was work­ing with Gold­man Sachs Group Inc to re­view strate­gic and fi­nan­cial al­ter­na­tives in­clud­ing a po­ten­tial sale, part­ner­ship or cap­i­tal struc­ture op­ti­miza­tion.

rev­enue of GNC Hold­ings Inc in the third quar­ter num­ber of GNC Hold­ings Inc‘s re­tail stores in the United States that Asian suit­ors do not want to take over

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