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GNC HOLDINGS: Sept. 15 Auction of Substantially All Assets Set

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Judge Karen B. Owens of the U.S. Bankruptcy Court for the District of Delaware authorized the bidding procedures proposed by GNC Holdings, Inc. and its debtor-affiliates in connection with the sale of substantially all their assets to Harbin Pharmaceutical Group Holding Co., Ltd. or its designee for $760 million, subject to overbid.

The Debtors are authorized to enter into and perform under the Stalking Horse Agreement, subject to the solicitation of higher or otherwise better offers for the Assets and entry of the Sale Order. The Stalking Horse Agreement is authorized and approved.

The Bid Protections, as set forth in the Stalking Horse Agreement, are approved in their entirety.

Paragraph 11 of the Bidding Procedures Order is modified, as follows: “On Aug. 37, 2020, subject to receiving the requisite approvals from the Required Sale Consenting Parties (as such term is defined in the Restructuring Support Agreement), the Debtors are authorized, but not directed, to select one or more Bidders to act as Stalking Horse Bidder(s), and are authorized, but not directed, to enter into a Stalking Horse Agreement (which will be binding, non-contingent, and accompanied by a Good Faith Deposit (as defined in the Bidding Procedures)) with each such Stalking Horse Bidder.”

The modified Bidding Procedures (Exhibit 1), are approved, reflecting the changes set forth in Exhibit 2.

For the avoidance of doubt, because the Debtors did not file a Stalking Horse Selection Notice within one business day after Aug. 3, 2020, the dates in the Bidding Procedures Order were extended pursuant to paragraph 10 of the Bidding Procedures Order.

The salient terms of the Bidding Procedures are:

a. Bid Deadline: Sept. 11, 2020 at 4:00 p.m. (PET)

b. Initial Bid: The value of each Bid for all or substantially all of the Debtors’ Assets must exceed (a) the Minimum Purchase Price, plus (b) the amount of the Bid Protections payable to any Stalking Horse Bidder, if applicable, plus (c) the minimum Bid increment of $2.5 million (or such other amount as the Debtors may determine in consultation with the Consultation Parties, which amount may be less than $2.5 million, including with respect to a Bid for less than all Assets).

c. Deposit: 7.5% of the aggregate value of the cash and non-cash consideration of the Bid

d. Auction: If more than one Qualified Bid is received by the Bid Deadline, the Debtors will conduct the Auction with respect to the Debtors’ Assets. For the avoidance of doubt, the Debtors may also conduct more than one Auction with respect to non-overlapping material portions of their Assets. The Auction will commence on Sept. 15, 2020, at 10:00 a.m. (ET) at the offices of Latham & Watkins LLP, 330 North Wabash Avenue, Suite 2800, Chicago, Illinois 60611, telephonically, or by video via Zoom, or such later time or other place as the Debtors will timely notify all other Qualified Bidders, in consultation with the Consultation Parties.

e. Bid Increments: $2.5 million (or such other amount as the Debtors may determine in consultation with the Consultation Parties, which amount may be higher or lower than $2.5 million) of additional value, if applicable

f. Sale Hearing: Sept. 17, 2020 at 1:00 p.m. (PET)

g. Sale Objection Deadline: Sep. 16, 2020 at 4:00 p.m. (PET)

h. Closing: Sept. 21, 2020

i. Credit Bid: At the Auction, a Secured Creditor will have the right to credit bid all or a portion of such Secured Creditor’s allowed claims.

j. Bid Protection: The Stalking Horse Bid provides for payment of a break-up fee equal to $22.8 million (i.e., 3% of the Purchase Price) and an expense reimbursement not exceeding $3 million.

Notwithstanding Bankruptcy Rule 6004(h), the terms and conditions of the Order are immediately effective and enforceable upon its entry.

A copy of the Agreement and the Bidding Procedures is available at https://tinyurl.com/yydtmt4e from PacerMonitor.com free of charge.

About GNC Holdings

GNC Holdings Inc. is a global health and wellness brand with a diversified omni-channel business. In its stores and online, GNC Holdings sells an assortment of performance and nutritional supplements, vitamins, herbs and greens, health and beauty, food and drink, and other general merchandise, featuring innovative private-label products as well as nationally recognized third-party brands, many of which are exclusive to GNC Holdings. Visit www.gnc.com for more information.

GNC Holdings and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-11662) on June 23, 2020. Debtors disclosed $1,415,957,000 in assets and $895,022,000 in liabilities as of March 31, 2020.

Judge Karen B. Owens oversees the cases.

The Debtors tapped Young Conaway Stargatt & Taylor, LLP and Latham & Watkins, LLP as legal counsel; Evercore Group, LLC as investment banker and financial advisor; FTI Consulting, Inc. as financial advisor; and Prime Clerk as claims and noticing agent. Torys LLP is the legal counsel in the Companies’ Creditors Arrangement Act case.