CITY OF INDUSTRY, Calif. (AP) -- Hot Topic said Thursday it agreed to be acquired by investment firm Sycamore Partners for about $592.4 million in cash.
Shares shot up 29 percent, hitting a six-year high, in morning trading.
Sycamore is paying $14 per share for the teen retailers, 30 percent above the City of Industry, Calif., company's closing stock price Wednesday.
Hot Topic's shareholders still have to approve the deal. All of Hot Topic's directors voted for it.
"We are very excited about the future growth for the company and know that Sycamore Partners will provide great resources and expertise to us as we operate as a private company," said CEO Lisa Harper.
Becker Drapkin Management, an investment firm and Hot Topic's largest shareholder with 8.4 percent of shares, also supports the deal.
Hot Topic Inc. runs its namesake stores as well as the Torrid chain, a plus-size brand. It's also testing a new store, Blackheart, which offers beauty products, lingerie and accessories. The company has about 800 stores in North America.
Hot Topic carved out a niche for itself selling music t-shirts and Twilight clothing and accessories. After taking a hit from the recession, it began closing unprofitable stores, changing its product lineup and shuttering its music download and social networking website. Sales started rising again last year after a long slump, and analysts expect a profit for the year that ended in January after two straight annual losses.
Hot Topic reports its results for its fiscal fourth quarter and year next week.
Shares rose $3.13 to $13.88 during morning trading, peaking earlier Thursday at $13.95, the highest price since January 2007. The stock had been up about 7 percent over the past 12 months through Wednesday's close.