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US eyes on Lloyds chain

Paul Farrelly
Saturday 19 October 1996 18:02 EDT
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General Nutrition of the US, the world's largest manufacturer and retailer of health supplements, may bid for Holland & Barrett when the health chain is put up for sale by the victor in the battle for Lloyds Chemists.

Unichem revived the war on Friday after clearance from the Department of Trade and Industry, catching German rival Gehe on the hop with a pounds 657m cash-and-shares offer.

Gehe offered pounds 650m in cash before both bids were referred to the Monopolies and Mergers Commission in March. This week- end it was still considering its next move. But observers said it was certain to re-enter the fray before the 21-day limit set by the City's Takeover Panel expired. "It's extremely unlikely that they won't," a source close to Gehe said.

Lloyd's is the UK's second largest chemists chain after Boots, with 924 stores. Whoever wins, however, will take the top slot - Unichem's Moss chain already runs 461 outlets and Gehe's Hill Pharmacy 357 compared with Boots' 1,226.

Both have undertaken to sell Lloyds' wholesale depots and have already received several approaches for Holland & Barrett.

The chain, with 370 shops, is the UK's only big independent retailer of health supplements in a pounds 340m market expected to grow to pounds 750m by 2000.

Next Thursday in Bristol, General Nutrition opens the first of 400 planned stores in the UK, an investment of pounds 100m over the next four years.

Sources at its Pittsburgh headquarters said it was still committed to the plans, but confirmed it had held extensive talks with Lloyds before and would not rule out a bid.

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