FILE PHOTO: U.S. flags fly outside of Saks Fifth Avenue in New York, U.S., June 19, 2017. REUTERS/Lucas Jackson

(Reuters) - Hudson's Bay Co HBC.TO shareholder Catalyst Capital Group Inc has opposed an agreed deal by the struggling Canadian department store operator with a group led by executive chairman Richard Baker to be taken private.

Catalyst and other investors holding about 28.24% of shares of Hudson’s Bay intend to vote against the agreement, the private equity firm said on Thursday.

The group urged the company’s board to explore alternatives, and said it was “aware of a number of strategic investors that are interested in participating in a process that is open and not constructed to benefit an insider.”

Catalyst, which controls about 17.49% of Hudson’s outstanding shares, said it is also prepared to work towards an offer for the company at “financially superior” terms to the current bid.

The Saks Fifth Avenue owner earlier this month agreed to a sweetened C$1.9 billion ($1.5 billion) offer from the Baker-led group, which collectively owns 57% of its shares.

Catalyst, which had opposed Baker’s previous lower offer, was considering its next step, while activist hedge fund Land & Buildings, which has a smaller undisclosed stake, was also against the deal, Reuters had reported.

The deal has to be approved by a majority of the shareholders not affiliated with Baker’s consortium in a shareholder vote, meaning those accounting for at least a 27% stake in the company must greenlight it.