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Report: China's Harbin mulls takeover bid for GNC

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Report: China's Harbin mulls takeover bid for GNC

China's Harbin Pharmaceutical Group Co. Ltd. is looking to acquire U.S. health and nutrition products retailer GNC Holdings Inc. and take the company private, Bloomberg News reported Oct. 22, citing people with knowledge of the matter.

Shares of Pittsburgh-based GNC jumped as much as 16.83% to $2.43 before closing up 10.10% to $2.29, while Harbin's stock rose as much as 1.32% in Shanghai to 3.83 Chinese yuan before closing up 0.79% to 3.81 yuan.

Harbin develops and manufactures pharmaceuticals in China and internationally. It is best known for its Hayao medicine brand, Bloomberg said.

The company has reportedly been in talks with potential advisers about an offer for GNC, but it has not made a final decision on whether to proceed.

Harbin is studying risks that could come from the deal including the possibility of regulatory scrutiny and the potential for GNC's business to further deteriorate, according to the report.

Bloomberg said representatives for Harbin did not immediately respond to requests for comment, while GNC declined to comment.

The Chinese company already holds a stake in GNC. In February, GNC secured $299.95 million in funding following a securities purchase agreement with Harbin.

The potential offer comes as GNC is looking at a range of refinancing options, which the company plans to complete by 2019-end, one of the sources told the news outlet.

Back in July, following the release of GNC's second-quarter earnings, CEO Ken Martindale told an investor presentation that the company is looking to close up to 900 stores as part of its 2019 and 2020 cost savings targets.

As of Oct. 22, US$1 was equivalent to 7.08 Chinese yuan.