The fashion brand could get a bid from a US private equity firm
(Picture: Ted Baker)Ted Bakers is in the takeover crosshairs after a US private equity firm said it was considering a cash bid.
In a statement, New York-based Sycamore Partners Management said it was in the early stages of weighing an all-cash offer but cautioned that “there can be no certainty that an offer will ultimately be made.”
Ted Baker said it had not received any approach, adding: “The board is confident in the company’s independent prospects and would evaluate any offer for the company against the strong shareholder value creation that it believes can be delivered as a standalone company.”
Shares shot up 16% in early trading.
A string of UK businesses have been snapped up by US private equity firms in the aftermath of the coronavirus pandemic. Morrison’s was bought by Clayton, Dubilier and Rice in October 2021 in a £7 billion deal, while UK private flight business Signature Aviation was bought by a consortium of Blackstone, Global Infrastructure Partners and Bill Gate’s Cascade Investment in May 2021.
Ted Baker’s share price has plummeted 95% since 2018, after its founder left under a cloud and the business struggled through difficult trading conditions during the pandemic. The company lost £98.2 million in 2020.
The takeover approach follows signs the company is making a return to profitability, posting a £25.3 million loss in the first half of 2021 compared with an £86 million in the same period in 2020. The company launched a three-year transformation programme in June 2020, replacing several board members, improving efficiencies and refreshing the brand and product lines.
Under UK takeover guidelines, Sycamore has until 15 April to make a formal offer for the company. Ted Baker has hired London-based investment bank Numis Securities to act as a financial adviser to any takeover bid.
Founder and CEO Ray Kelvin resigned from the business in March 2019 amid accusations he massaged employees, kissed their ears and created a culture of “forced hugging”. The company made updates to its HR policy following an investigation into the claims. Over 100 current or former staff are understood to have made complaints.
