Hollywood—Barely a week after reporting it swung into a wider first quarter loss, struggling Frederick’s of Hollywood Group Inc. said Thursday it agreed to a deal that would take the lingerie retailer private.
Harbinger’s HGI Funding LLC and other shareholders, which combined control 89% percent of the company’s shares, said they will offer the remaining shareholders 27 cents a share— a 50% premium to the company’s closing price on Sept. 27, the last day of trading before the intent to buy the company was made public.
The deal values the entire company at about $10.6 million, based on the 39.3 million shares that it has outstanding.
CEO Thomas Lynch is expected to remain in his post for at least three years after the deal closes, the company reported.
Frederick’s of Hollywood has 112 stores, a catalog and an online business. The company last week reported a $7.7 million first quarter loss with a 12% drop in net sales to $19.7 million.