4th Apr 2022 14:16
(Alliance News) - Ted Baker PLC is set to see if a suitor can match its valuation as the fashion retailer launched a formal sale process after receiving an improved takeover proposal and fresh bid interest.
Ted Baker on Monday said it has received a third takeover offer from Sycamore Partners Management LP.
The stock was up 14% at 146.41 pence on Monday and is up 84% from a 12-month low of 79.60p in February.
Ted Baker said it was evaluating the "improved proposal from Sycamore," having launched a formal sales process in agreement with the UK Takeover Panel. It also said it had received another "unsolicited" approach by an unnamed party.
The retailer did not disclose the value of the latest approach by Sycamore or the unnamed third party.
Ted Baker added interested parties will be invited to submit non-binding offers to its financial advisers, Evercore and Blackdown Partners. It said a select number of these will move to a second phase.
The company reiterated its previous statements that it is focusing on maximising value for shareholders when considering potential takeovers.
Hargreaves Lansdown analyst Sophie Lund-Yates said takeover interest in British companies is at "fever pitch" as valuations come down following the Covid-19 pandemic and Brexit.
The analyst attributed Ted Baker's downward spiral to challenging pandemic trading conditions, alongside its exposure to formal wear, which was one of the worst hit areas during lockdowns.
The company was also hammered by the pandemic which prompted a profit warning and also went into Covid in a weak spot following years of decline.
Most notably founder Ray Kelvin stepped away from his position as chief executive after accusations of inappropriate behaviour.
Kelvin, who denies the allegations, is still a shareholder in the business.
"The price that Ted Baker will accept from a buyer is clearly more ambitious than what the existing bids offer. Ted is keen to point out the potential growth for the brand, including around the benefits of a new leaner, more digital operation. There may well be a disconnect between Ted Baker's valuation of itself and the amount a third party is willing to spend on a much improved, but nevertheless struggling, bricks and mortar retailer," the analyst said.
By Arvind Bhunjun; [email protected]
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