British high-street fashion retailer, Ted Baker, has reportedly begun a formal sale process after receiving an improved takeover proposal from Sycamore as well as new bid interest.
The company has reported that the American private equity firm has raised its proposal for the third time, but has not revealed by what amount.
Last week, it rejected Sycamore’s second offer, which would have valued the retailer at £253.8 million ($333 million), claiming that it was significantly undervaluing the brand.
Meanwhile, the retailer has not identified the other party which has shown interest in the takeover.
In a statement, Ted Baker stated that its board has decided on conducting an orderly process to determine whether there is a bidder that can offer a value that not only appeals to the board but is also on par with its standalone prospects as a listed company.
Interested parties will be invited for submitting non-binding offers to Ted Baker’s financial advisers, Blackdown Partners and Evercore.
The retailer added that it does not know whether Sycamore would participate in the process or not.
With the news about the firm’s third proposal, shares of Ted Baker have jumped by over 12%, valuing the company at around £265 million ($347 million) with shares trading at 143.6p a piece. Four years ago, Ted Baker’s shares were trading at their highest at 2,500p a piece.
Ted Baker, which employs thousands of staff, trades from several hundred concessions and standalone shops across the globe but has been struggling since its founder, Ray Kelvin’s, departure over claims of inappropriate behavior towards female employees in 2019.
A sale of the business would mean a jackpot for Kelvin as he still holds an 11.48% stake in the company.
Following Kelvin’s exit, the retailer was hit by accounting mishaps and profit warnings, with the Covid-19 pandemic further weakening its financial position. The company had cut down on hundreds of workers in 2020 and raised over £100 million ($131 million) to prop up its balance sheet.