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GNC sale to stall as suitors eschew US operations

China Daily | Updated: 2016-12-02 08:19

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.

Bloomberg
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