Frederick's of Hollywood Group has entered into a deal to be taken private by a group including HGI Funding, valuing the intimate apparel brand at around US$11m.

HGI Funding, a subsidiary of Harbinger Group, and a number of shareholders who collectively own 89% of the company's stock, will offer to buy out the remaining shareholders for 27 cents per share.

The price represents a premium of 50% to the closing price of the firm's shares on 27 September, the last trading day before the offer was made, and a premium of 46% over the average closing price of its stock for the 45 trading days prior to that date.

Frederick's said the transaction with the consortium was "fair to and in the best interests of the company's shareholders".

CEO Thomas Lynch has agreed to continue to serve as chief executive officer for three years following the merger.

The move is the latest attempt by Frederick's to keep the company afloat. The company has been struggling with slower sales and widening losses. In its first quarter results published this month, the group saw its net losses widen to US$7.7m from a loss of $5.2m in the prior year period.

Comparable store sales were down 11.7% and total store sales down 15.2%.

Frederick's sells products across a chain of 112 stores, as well as through a catalog and an online business.