MONTREAL - DavidsTea Inc. (DTEA.O) says its co-founder resigned from its board of directors this week as the company looks to lead a private transaction for the tea chain.

The Montreal-based company, which held its initial public offering in June 2015, says in a statement that Herschel Segal resigned from the board effective March 5.

Segal, who controls Rainy Day Investments Ltd., informed the board about two weeks ago on behalf of RDI that the company decided to start exploring leading a privatization transaction for the struggling chain of 236 tea shops across Canada and the U.S.

DavidsTea says RDI wants to present a proposal for an offer to buy out DavidsTea's minority holders or for an alternative strategic transaction, and that it does not wish to sell any of its DavidsTea shares currently.

The hot beverage retailer announced in Dec. 2017 that its board is considering strategic alternatives such as a potential financing, refinancing or restructuring.

The board formed a special committee of independent directors to consider proposals, including any made by RDI.