This undated photo shows Hong Kong fashion retailer I.T Ltd's store in Causeway Bay, Hong Kong. (PHOTO PROVIDED TO CHINA DAILY)

Hong Kong fashion retailer I.T Ltd agreed to go private in a cash deal worth about HK$1.3 billion (US$168 million) with its business decimated by the pandemic and a shift to online retailing.

As part of the proposal, the founders will retain about 51 percent ownership, with private equity firm CVC Capital Partners owning the remainder

The deal, which is backed by private equity firm CVC Capital Partners, will see non-founder shares bought at HK$3 a piece in cash, according to a Hong Kong stock exchange filing. That’s about a 55 percent premium to the stock’s last closing price, according to the filing. As part of the proposal, the founders will retain about 51 percent ownership, with CVC owning the remainder.

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The company cited challenging market conditions, including a digital disruption to the retail industry and the COVID-19 outbreak as reasons for agreeing to the deal.

“These factors require the company to re-strategise, undertake a deeper business transformation and restructure in order to achieve long-term sustainable growth,” reads the filing.

I.T has applied for a resumption of trading in Hong Kong on Monday. Shares had been halted Nov 30 pending the announcement.

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The deal is still subject to shareholder approval.

Morgan Stanley is advising the offeror.