UPDATE 2-Vitamin Shoppe owner taken private in $2.6 bln deal with CEO-led group

(Adds details on results in paragraph 6,7; background in paragraph 8, share movement)

May 10 (Reuters) - Vitamin Shoppe owner Franchise Group Inc would be taken private by a group led by CEO Brian Kahn in a deal valued at about $2.6 billion, the company said on Wednesday.

Shares of Franchise, which also owns retailer Buddy's Home Furnishings and discount furniture store American Freight, climbed about 3% premarket.

The consortium, which also includes B. Riley Financial Inc and private equity firm Irradiant Partners, would pay $30 per share, slightly above stock's closing price of $29.92 as of Jan. 9, a day before reports of a potential management buyout first surfaced.

The offer price represents an equity value of about $1.05 billion. The company in March disclosed it had received an unsolicited proposal for a buyout, but did not disclose any details about the buyer.

The deal is expected to close in the second half of 2023, after which Franchise's management team, including Kahn, would continue to lead the company and run its current portfolio of retail brands.

Separately, Franchise reported a near 3% drop in first-quarter revenues to $1.10 billion, hit by weakening demand for discretionary items and home goods as inflation-hit consumers cut back on non-essential spending.

The company, which operates more than 3,000 retail locations primarily located in the United States, also posted a loss for the quarter ended April 1, compared to a profit last year, and withdrew its forecast for 2023.

Franchise last year was in exclusive talks with Kohl's Corp to acquire the department store chain, but Kohl's in July called off the sale citing sinking markets and difficult financing conditions. (Reporting by Deborah Sophia in Bengaluru; Additional reporting by Ananya Mariam Rajesh; Editing by Anil D'Silva and Shailesh Kuber)