L1 Retail outbids AS Watson for UK chain

L1 Retail, an investment company owned by Russian billionaire Mikhail Fridman, has won a bidding battle for health retailer Holland & Barrett.

L1 Retail will pay £1.77 billion (US$2.3 billion), far outbidding the $1.2 billion AS Watson was reported to have been offering and other would-be investors. The deal will be settled in September and is subject to regulatory approvals.

Holland & Barrett has 1300 stores in 16 countries, although the majority are in the UK. Its former parent was private equity investor Carlyle which bought the chain as part of a larger $3.8 billion acquisition of Nature’s Bounty in 2010.

L1 Retail is a $3 billion fund, a subsidiary of the Letter One group which also has divisions covering technology, health and energy. Among the group’s assets is a $200 million investment in Uber.

“We aim to invest… in a few retail businesses that we believe can become leaders by moving with and leading long-term trends,” the group says on its website. “Initially, L1 Retail is focusing on investing in retail businesses in Europe, including the UK, and emerging markets. Subsequently, the focus will move elsewhere, including North America.

L1 Retail managing partner Stephen DuCharme said he believed Holland & Barrett is well positioned to benefit from structural growth in the growing £10 billion pound health and wellness market “and has multiple levers for long term growth and value creation”.

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