(Filed Under Financial and General Interest News). The acquisition of Frederick’s of Hollywood Group Inc. by “HGI Funding LLC, a wholly owned subsidiary of Harbinger Group Inc., and certain of the company’s other common and preferred shareholders” was approved May 28th “by over two-thirds of the aggregate voting power of the company’s common stock.”
The total transaction is valued at approximately $24.8 million, according to the company announcement. The plan to take the company private was first revealed last September.
Key investors in Frederick’s include Phillip Falcone, who controls Harbinger (and whose net worth Forbes estimates at $1 billion) and William Harley (who, when the deal was first announced was said to own about 44% of the company’s shares).
As a private company, Frederick’s “common stock will cease to be quoted on the OTCQB.”
“We look forward to entering this new phase of the company’s history and having access to the capital resources needed to implement a turnaround strategy that can take full advantage of the Frederick’s of Hollywood brand,” declared long time executive Thomas Lynch, the chairman and CEO. “This is going to be an exciting period for the company and we thank all of our employees, suppliers and customers for standing with us and believing in our brand.”
In the past six years or so the company has reported combined losses of over $100 million (most recently a loss of $5.1 million in the fiscal second quarter 2014) and operates 94 stores and an online website. As of February, 2008 the company had been operating 135 retail shops.
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