GNC Holdings Inc’s (NYSE: GNC) stock gained about 6.9% in early trading Monday after the company said it’s considering selling itself.
GNC, the vitamins and health-supplement chain, announced the news days after its disappointing earnings and projections, which lowered the stock price by 29 percent last Thursday.
According to the release on Monday, GNC’s current operating plan is evaluated by a leading global specialty health and wellness retailer, which is also considering the potential value maximizing alternatives such as refranchising strategies, capital structure optimization, partnership and other collaborations, or potential sale of the firm. Board of Directors is also working with Goldman, Sachs & Co. and Wachtell, Lipton, Rosen&Katz as legal advisor during the process.
“We are in the early stages of a broad review and will take the time we need to thoroughly evaluate our opportunities to achieve the best results for our shareholders, business partners and associates,” said Michael F. Hines, GNC's Chairman. “While the review is ongoing, GNC will continue to act with the necessary urgency to deliver improved financial performance by addressing our near-term challenges and continuing to execute our strategic initiatives.”
The company could be acquired by Vitamin Shoppe Inc., Christopher Horvers, analyst in JPMorgan Chase & Co., said in a note. If GNC buy back its own stock and go private, the company could also be bought by a private equity buyer.
However, GNC said that there can be no assurance of any specific action or outcome; and before the Board has approved a specific action, GNC will not disclose details about the further developments about the review.