Ted Baker shares hit as suitor withdraws bid for retail chain
Shares of Ted Baker fell more than 15% after the company said its first-choice suitor had decided not to make a bid, forcing the fashion chain to consider other options.
The preferred bidder – reportedly Juicy Couture and Authentic Brands, owner of Forever 21 – had indicated that its decision was not due to its due diligence review, Ted Baker said.
The London-listed chain had gone up for sale in April and at the end of May picked its preferred suitor to push the process forward after a flurry of revised proposals following the withdrawal of private equity group Sycamore.
“With record UK consumer confidence, the cost of living crisis, the possibility of a recession and unstable stock markets, it is understandable that Ted Baker is desperate for a buyer,” said Victoria Scholar, chief investment officer at the interactive investor. online platform.
Known for its suits, shirts and dresses, Ted Baker is in the midst of a recovery plan and in May reported robust sales in the months ahead as demand for office and leisurewear rebounds.
A Sky News report last month said Authentic Brands was willing to offer more than 150p per Ted Baker share. Sycamore had offered a deal in March at 137.5p per share, or more than £250million, but Ted Baker rejected his repeated overtures.
The private equity firm then participated in the initial phase of the Ted Baker sale process before walking away and it is unclear whether it would join the tender.
Its shares fell 15% to 116p, valuing it at £225.5million.
The company’s market value has plummeted in recent years after former CEO Ray Kelvin left in 2019 amid misconduct allegations and after the group disclosed an accounting scandal in 2020.
Mr Kelvin has denied the allegations and still owns nearly 12% of the company he founded in Glasgow, Scotland, in 1988 as a one-store shirt specialist.