GNC Sale Said to Stall as China Suitors Eschew U.S. Outletsby and
Vitamin retailer held talks with several Chinese companies
Suitors only expressed interest in buying GNC’s Asian business
GNC Holdings Inc.’s talks on a potential sale have stalled following disagreements over the structure of a deal for the U.S. vitamin and supplement brand, people with knowledge of the matter said.
The Pittsburgh-based retailer had held discussions with several Chinese suitors about a sale of the entire company, the people said, asking not to be identified as the information is private. The Chinese firms expressed interest only in buying GNC’s Asian business and didn’t want to take over its network of more than 6,700 retail outlets in the U.S., according to the people.
GNC told interested parties it was unwilling to carve out its Asian operations and thereby lose access to a key growth market, the people said.
Shares of GNC fell as much as 6 percent in U.S. trading Thursday and closed almost 5 percent lower at $13.76, valuing the company at about $941 million. The stock is down about 56 percent this year.
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 people said. The company said in May it’s working with Goldman Sachs Group Inc. to review strategic and financial alternatives including a potential sale, partnership or capital structure optimization.
Representatives for GNC and Goldman Sachs didn’t return phone calls seeking comment.