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Ted Baker puts itself up for sale after takeover interest

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·Finance Reporter, Yahoo Finance UK
·2-min read
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Ted Baker, Knightsbridge, London.
Ted Baker has more than 500 shops and concessions around the world. Photo: PA

Ted Baker (TED.L) has launched a formal sale process after rejecting a series of “unsolicited” takeover bids.

The fashion retailer turned down two proposals from US private equity group Sycamore Partners, the latter of which valued the business at £254m.

The first proposals were rejected after they “significantly undervalued” Ted Baker, the company board said.

This Monday, it said Sycamore has come back with a third, higher bid, while it also received another “unsolicited” approach by an unnamed party.

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Given the level of interest, the fashion house has decided to invite offers, although a sale is not certain.

The sale process allows talks with interested bidders to take place on a confidential basis.

"The board has decided to conduct an orderly process to establish whether there is a bidder prepared to offer a value that the board considers attractive relative to the standalone prospects of Ted Baker as a listed company,” it said in a statement.

Ted Baker added that interested parties will be invited to submit non-binding offers to its financial advisers, Evercore and Blackdown Partners.

It said a select number of these will move to a second phase.

Ted Baker share price jumped 14%. Chart: Yahoo Finance
Ted Baker share price jumped 14%. Chart: Yahoo Finance UK

Ted Baker added that it has not yet had discussions with Sycamore regarding whether the US investment firm will participate in the sale process.

The company was hammered by the pandemic, but it had also gone into COVID in a weak spot following years of decline.

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Most notably founder and chief executive Ray Kelvin stepped away from his position after accusations of inappropriate behaviour.

Kelvin, who denies the allegations, is still a shareholder in the business with an 11.48% stake.

Commenting on the bid interest Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: "The structural decline in retail, coupled with Ted's exposure to occasionwear, which was one of the worst hit areas during lockdowns, have made for very challenging conditions.

"The price that Ted Baker will accept from a buyer is clearly more ambitious than what the existing bids offer.

"Ted is keen to point out the potential growth for the brand, including around the benefits of a new leaner, more digital operation.

"There may well be a disconnect between Ted Baker's valuation of itself and the amount a third party is willing to spend on a much improved, but nevertheless struggling, bricks and mortar retailer."

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