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Ted Baker rejects £250m bid from private equity firm Sycamore

Tom Shearsmith
28 March 2022

Ted Baker has rejected the approaches of US private equity giant Sycamore, as it backed its strategy to bounce back from the pandemic over the offer on the table.

The retailer said it rejected an unsolicited 137.5p-per-share bid last Tuesday, just days after it had sent a declined a 130p-per-share bid.

The company said: “The board of Ted Baker carefully reviewed both of Sycamore’s proposals with its advisers and concluded they significantly undervalued Ted Baker and failed to compensate shareholders for the significant upside that can be delivered by Ted Baker as a listed company.

“Ted Baker is a leading global brand with a strong future. The management actions taken over the last two years have put the business on a firm footing and it is now well on the way to recovery following a turbulent period. The board is focused on delivering value for Ted Baker’s shareholders well in excess of the price offered by Sycamore.

The company was hammered by the pandemic, but it had also gone into COVID-19 in a weak spot following years of decline. It subsequently axed hundreds of jobs and raised £100 million to shore up its balance sheet.

Notably, Founder and Chief Executive Officer Ray Kelvin recently stepped away from his position after accusations of inappropriate behaviour. Kelvin is still a major shareholder in the business.

Kelvin founded the business 30 years ago specialising in men's shirts and named it after his alter ego. It went on to become a global fashion and lifestyle brand offering menswear, womenswear, childrenswear, homewares, fragrance and watches among other categories, and was floated in 1997.

Hargreaves Lansdown equity analyst Laura Hoy said: “It’s unsurprising that management’s not keen to give up the reins after a few difficult years. We’re finally starting to see some greens shoots from the group’s turnaround efforts now that formal occasions are back on the social calendar. However there’s still a bumpy road ahead, with inflation weighing on customers’ willingness to shell out for a new outfit.

“Ted’s prices are on the higher end of the spectrum, but not quite reaching into luxury, meaning its customers won’t be immune to the cost-of-living squeeze and could start to slide down the value chain.”

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