Sycamore Partners, the US-based private equity group, has made a £250m bid for London-listed fashion chain Ted Baker.
Sky News has learned that a proposal to value Ted Baker at 130p per share has been submitted in writing in recent days.
It was unclear this weekend if it had been officially rejected, although city sources suggested it was extremely unlikely it would be endorsed by the retailer’s board.
If turned down, Sycamore faces the dilemma of either increasing its bid before a deadline set by the UK takeover board in mid-April or withdrawing.
After Sky News revealed this month that Sycamore is considering bidding for Ted Baker, the buyout firm reiterated its interest in a statement to the London Stock Exchange.
It hired Numis, the investment bank, to advise it on its interests.
At the time, Ted Baker said a formal approach was not yet available.
“Ted Baker continues to make good progress on its transformation and the company is emerging from COVID as a stronger and more financially sustainable company,” the company said.
“The Board believes in the Company’s independent prospects and would consider any offer for the Company based on the strong shareholder value it believes can be delivered as a standalone company.”
Ted Baker shareholders are unlikely to be receptive to a 130p-per-share approach as the company’s valuation has tumbled from a peak of £1.4bn in recent years.
As of Friday’s close, the market cap was just £233m with a share price of 126.2p.
Despite its modest market capitalization, Ted Baker occupies a prominent place in UK fashion retail.
It deals with hundreds of standalone businesses and concessions worldwide and employs thousands of people.
The company was left without a permanent chairman following the death of John Barton, the City’s notable, late last year.
Ted Baker has been through a hot patch in recent years, most notably in 2019 when founder Ray Kelvin left the company following allegations of inappropriate behavior towards female colleagues.
It has since been beset by profit warnings and accounting mishaps, and has been forced to address the COVID-19 pandemic from a position of relative financial weakness.
In 2020, the company has cut hundreds of jobs and raised £100m to shore up its balance sheet.
Like other fashion retailers, it is now struggling with the challenges posed by rising inflation, higher energy costs and dwindling consumer confidence.
Nonetheless, business is showing signs of recovery, with a recent trade update revealing that sales in the 12 weeks ended Jan. 29 were up 35 percent compared to the same period last year.
Mr. Kelvin remains a significant shareholder in the company and is likely to have an impact on whether it remains independent.
Sycamore specializes in investing in the retail sector, having owned brands including upscale shoe label Kurt Geiger and is reportedly reviewing a $9 billion takeover bid for US department store chain Kohl’s.
Alleged involvement in a £6bn auction of Boots, the drugstore chain, has sparked skepticism from industry insiders.
Sycamore and Ted Baker both declined to comment.
US takeover firm Sycamore is making a £250m bid for fashion chain Ted Baker | business news
Source link US takeover firm Sycamore is making a £250m bid for fashion chain Ted Baker | business news