Competing Bidder For GNC Argues Expected Sale To Chinese Firm Would Cause Security Risks In US
DynamicVetnures also contends Harbin Pharmaceutical is attempting to avoid a regulatory review by federal agencies on national security and other questions that is required when foreign companies make large investments in US businesses.
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Deadline passed for “other qualified bidders to submit higher or otherwise better offers to purchase” full ownership of GNC. Approving sale to Harbin Pharmaceuticals, already its largest shareholder, depends partly on approval by US bankruptcy court, where a hearing is set for 17 September.
Chapter 11 bankruptcy protection filing positions largest shareholder Harbin Pharmaceutical to acquire full ownership for $760m. But petition also gives it an option of reorganizing with $525m financing if a sale is not completed within 141 days.
Jefferies analysts point out more sales of supplements, particularly sports nutrition products, already were moving online before COVID-19 prompted quarantine orders and spike e-commerce sales. GNC could have capitalized but didn’t have capital available to make its online sales platform and operations large enough to support potential growth.