- Private equity firm Sycamore had offered 137.5p back in March
- Authentic Brands plans to split the company's brands from its operations
Shares in Ted Baker (TED) jumped by 17 per cent after the company’s board embraced a 110p a share takeover offer from Reebok’s US-based owner Authentic Brands Group.
The all-cash offer values the company at £211mn, which the company said is an 18 per cent premium to yesterday’s closing price and an 11 per cent increase on the level its shares were trading at when the current offer period started in March. However, it is well below the 137.5p a share bid received from private equity firm Sycamore in the same month.
Ted Baker’s interim chair Helena Feltham said the bid had the support of the company’s biggest shareholders, including Toscafund, Schroders, Oasis and the brand’s founder Ray Kelvin, who resigned from the company amid misconduct allegations towards staff three years ago.
Between them, the major shareholders own a 50.7 per cent stake.
Authentic Brands, which withdrew plans for its own IPO earlier this year, said Ted Baker would be “better suited to private ownership” that will allow for a restructuring. It plans to split the business into a holding company that retains the brand’s intellectual property, plus one or more businesses that will run its wholesale, retail and e-commerce operations.
Authentic Brands emerged as the preferred bidder for Ted Baker back in April but it then backed away, citing a deteriorating macroeconomic environment. Ted Baker has racked up heavy pre-tax losses in its last three years.
The backing of the majority of shareholders and the increase in its share price to 108.8p, just below the offer price, suggests the bid will go through but the premium on offer seems pretty measly – especially when you consider the shares were trading above 140p at the end of May. Await documents.
