Vitamin World, the Holbrook-based retail chain that filed for bankruptcy protection in September, has received a $28 million offer from an affiliate of a Chinese dairy producer to acquire its 156 remaining stores after a previous bid fell through.
The new bid calls for Valuable Hero International, based in the British Virgin Islands, to pay $28 million cash, assume liabilities of about $1.2 million for employees’ accrued vacation and sick days, and pay half the costs related to property leases that exceed $2.4 million.
Valuable Hero is an affiliate of Beijing-based Feihe International Inc., which produces and distributes milk powder and soybean powder in China.
A filing in federal bankruptcy court in Delaware last week said that negotiations with a previous bidder, Holbrook-based Latium Enterprises, “broke down” and the agreement with Valuable Hero becomes the “stalking horse” bid that potential rivals will have to better. Latium had bid $26 million in cash.
Judge Kevin Carey of U.S. Bankruptcy Court in Delaware designated Valuable Hero as the “stalking horse” purchaser at a hearing on Friday, with an anticipated closing date on or before Dec. 31.
Under the “stalking horse” agreement, Valuable Hero would receive a “break-up fee” of $500,000 and expenses of up to $350,000 if the deal is not consumated.
Latium, owned by British entrepreneur Brian Kennedy, is involved in financing, consulting, manufacturing and commercial property ownership, according to data from S&P Global Market Intelligence.
Vitamin World was previously owned by Ronkonkoma-based Nature’s Bounty Co., which sold 90 percent of the chain in February 2016 to Manhattan private equity firm Centre Lane Partners LLC for about $25 million. The remaining 10 percent was owned by Vitamin World executives.
Vitamin World initially proposed closing 51 of its 334 locations in more than 30 states, but increased that number during the Chapter 11 bankruptcy process.
Valuable Hero was advised on the bid by multinational law firm DLA Piper LLC, which did not immediately respond to a request for comment.
Vitamin World did not immediately respond to an email requesting comment.