GNC exchanges $98.9 million of 1.5% convertibles due 2020 for stock

New York, Dec. 21 – GNC Holdings, Inc. agreed to exchange $98.9 million of its 1.5% convertible senior notes due 2020 for 14.6 million shares of class A common stock plus $0.5 million of cash for accrued interest.

Settlement is planned for Dec. 26, according to a news release.

The company said that the exchange – which will be carried out through privately negotiated transactions – is part of a strategy to “optimize” the company’s capital structure and “enhance shareholder value.”

As of Sept. 30, GNC had $287.5 million of the convertible outstanding, according to its most recent 10-Q filing with the Securities and Exchange Commission.

The conversion price is $66.16, but the conversion option is subject to a 130% stock price hurdle.

GNC stock closed at $4.90 on Wednesday.

Last month, the company pulled a planned $500 million offering of senior secured notes due 2022 and a term loan financing that started at $705 million, was increased to $1.2 billion after the demise of the note sale and then was abandoned altogether.

GNC Holdings is a Pittsburgh-based health, wellness and performance retailer.

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