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Frederick's of Hollywood considers offer to go private

September 30, 2013|By Tiffany Hsu
  • Frederick's of Hollywood is considering a proposal that would take the lingerie company private.
Frederick's of Hollywood is considering a proposal that would take… (Christina House / Los Angeles…)

Frederick’s of Hollywood, a local lingerie brand that competes with behemoth Victoria’s Secret, is considering a proposal from some of its largest shareholders that would take the company private.

The Hollywood underwear seller said Monday that it received a non-binding offer from a group of investors last week.

HGI Funding, TTG Apparel, Tokarz Investments, Fursa Alternative Strategies and Arsenal Group -- which collectively own the vast majority of Frederick’s outstanding shares of common stock -- said they would pay 23 cents a share for the rest of the pot.

The deal would represent a 28% premium on Frederick’s 18-cent closing price Friday.

The stock closed up nearly 17%, or 3 cents, to 21 cents a share Monday.

Frederick’s has been considering a sale for more than a year, saying last summer that it was exploring strategic moves.

In June, the company said it suffered a net loss of $375,000, or 2 cents a share, for the third quarter that ended April 27 after earning $3.3 million, or 9 cents a share, in the same period a year earlier.

Revenue slid nearly 23% to $23.3 million from $30.2 million a year earlier. Same-store sales fell 20.5%.

The company sells intimates through 112 retail stores, a catalog and a website.


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