With Sycamore, Others in Hot Pursuit, Ted Baker Puts Self Up for Sale
LONDON — Amid mounting interest in the company, including a fresh offer from Sycamore Partners, Ted Baker has put itself up for sale.
The British high-street retailer confirmed Monday in a statement to the London Stock Exchange that any further bids will take place within the context of a “formal sale process,” and on a confidential basis.
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The company said anyone interested in making an offer can contact Ted Baker’s financial advisers, Evercore and Blackdown Partners. Ted Baker said it plans to conduct a “targeted,” multiphase sales process, “focused on those parties who understand and value the full potential of this unique brand.”
The board said it is “focused on maximizing value for shareholders. In view of the interest expressed by potential offerers, and having consulted its major shareholders, it 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 stand-alone prospects of Ted Baker as a listed company.”
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As part of its announcement, Ted Baker confirmed it has received a third, “improved proposal” from Sycamore Partners, and “other, unsolicited third-party bid interest.”
As reported, Ted Baker knocked back two offers from the deal-hungry Sycamore, one for 1.30 pounds a share, and a second one for 1.38 pounds, because they “significantly undervalued” the company. It did not confirm the value of the third offer.
Ted Baker shares are currently trading at around 1.47 pounds, having risen 14 percent on the news of a formal sale process.
Compared with a year ago, the share price is up nearly 17 percent, but compared with five years ago, the price is down nearly 100 percent.
The past few years haven’t been easy for Ted Baker. Following founder Ray Kelvin’s resignation amid staff complaints about inappropriate physical contact (which Kelvin always denied), the company went on to face a series of crises. It posted a string of profit warnings and suffered accounting and management troubles.
In 2020, John Barton took over as non-executive chairman of Ted Baker, while Rachel Osborne was promoted to the role of chief executive officer. Formerly Ted Baker’s chief financial officer, Osborne was the third person in 12 months to hold the CEO role at the company.
Barton died suddenly in December and the company has been without a chairman since then.
Under Osborne the company has been making improvements and is due to report its year-end results in May.
The board is bullish about Ted Baker’s prospects and on Monday said the company is “well positioned to create significant value for shareholders and continues to make good progress with its transformation.”
The board noted that despite the impact of Omicron on the fourth quarter of the year to Jan. 29, Ted Baker delivered group sales growth of 35 percent year-on-year, while trading margin “improved strongly, demonstrating the progress the company is making in re-establishing its premium brand positioning. Ted Baker has a strong balance sheet, with a net cash position at year end, and ample liquidity headroom to continue to grow.”
Ted Baker’s board also confirmed that it has not yet had any discussions with Sycamore “as to whether it wishes to participate in the formal sale process.”
If Sycamore does not confirm an intention to participate in the process, it will continue to be subject to a deadline of 5 p.m. on April 15, by which time it must announce either a firm intention to make an offer or walk away, per market rules.
In the 2021 fiscal year, Ted Baker reported 352 million pounds in revenue, an operating loss of 98.9 pounds, and an after-tax loss of 86.4 million pounds.
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