March 3 (Reuters) - B. Riley Financial's ( RILY )

co-founder and co-CEO Bryant Riley has suspended his bid to

privatise the investment bank, according to a regulatory filing

on Monday.

Riley, the bank's largest shareholder, proposed an offer of

$7 per share last year for the remaining shares he does not

currently own, in a deal valuing the bank at $212 million.

The non-binding, take-private offer came last year amid

turmoil arising from the bank's association with Vitamin

Shoppe-owner Franchise Group, which drew attention from both

investors and regulators.

Shares of the bank rose 5.6% in extended trading following

the announcement of its preliminary Q4 results.

B. Riley participated in a management-led buyout of

Franchise in 2023. Its dealings with Franchise's former CEO,

Brian Kahn, came under review after Bloomberg News reported that

he was implicated as a co-conspirator in a securities fraud case

involving Prophecy Asset Management.

Kahn has denied the allegations, saying he was unaware of

Prophecy's alleged fraudulent activities against investors.

Both an external investigation and an internal review

conducted last year cleared B. Riley of any misconduct.