Holland & Barrett owner bids £900m to maintain control

HOLLAND & Barrett’s Russia-linked owner is staging a £900m bid to cement its hold over the health food chain amid swirling concerns about sanctions.

Letterone has written to Holland & Barrett’s lenders to offer to buy back £890m worth of debt at a discount, months after banks hired advisers for talks following a spate of sanctions on Russian businessmen. Letterone is not subject to sanctions, although its cofounders Mikhail Fridman and Petr Aven were sanctioned in the UK and EU. The pair have stepped back from the business, having their stakes frozen.

In May, Holland & Barrett lenders were said to have been anxious about the effect of the restrictions on the pair and what it meant for Letterone. A month earlier, concerns over the legal status of Letterone had held up a Holland & Barrett interest payment.

A spokesman for the investment group said: “Lenders have expressed significant concerns over the situation. L1 is therefore making a fair offer that gives lenders a choice about whether to stay involved. It is time to focus on a great business that provides vital jobs and improves communities’ health and wellbeing.”

The spokesman added: “Letterone is supportive of the actions being taken by the management of Holland & Barrett to achieve the group’s long-term vision.”

Sky News first reported Letterone’s latest offer to buy back outstanding borrowings.