Ted Baker turns down a $334 million takeover proposal from Sycamore

Ted Baker turns down a $334 million takeover proposal from Sycamore

by Pranali Mehta

British high-street fashion brand, Ted Baker, has reportedly rejected two takeover bids from American private equity major, Sycamore, backing its ongoing bounce-back strategy from the pandemic instead.

Sycamore’s initial bid was 130p per share, which the retailer turned down, causing Sycamore to again make a revised bid of 137.5p last week, which the latter turned down as well.

Although the proposal would have valued Ted Baker at £254 million ($334 million), it still undervalued the group which was trading shares as high as 2,500p ($3) per share, only four years ago.

The company stated that its board has carefully reviewed Sycamore’s proposals and consulted with sit advisers, following which they concluded that they majorly undervalued Ted Baker, having failed to effectively compensate for the substantial benefits that can be delivered by a publicly listed company such as itself.

It added that the brand’s management actions over the past two years have given the business a firm footing and that it is on its way to recovery after having gone through a turbulent time.

Ted Baker stated that the board will now focus on delivering more value to its shareholders than the price offered by Sycamore.

The company, which is making its recovery from the pandemic, had already been facing setbacks like management changes, and profit warnings after its founder and CEO, Ray Kelvin, was accused of inappropriate behavior and later stepped down from his position in 2019.

Kelvin, however, is still a major shareholder in Ted Baker.

The company is currently following a three-year turnaround plan to boost its savings and strengthen its online presence under CEO Rachel Osborne.

Laura Hoy, Equity Analyst at Hargreaves Lansdown, stated that the business is showing some signs of recovery with its turnaround efforts now that people are organizing and attending formal social events again.

However, Hoy added that there are still roadblocks in its way as rising inflation and cost-of-living squeeze will keep customers from buying new outfits, as even though Ted Baker is not a luxury brand, it is on the higher end of the spectrum.

Source credit: https://www.independent.co.uk/business/ted-baker-rejects-ps250m-bid-from-us-private-equity-firm-sycamore-b2045451.html

Pranali Mehta

A chemical engineer by qualification, Pranali Mehta dutifully walked down the slated path and worked in a chemical firm for a year. Her passion for writing however, pushed her into experimenting with the same as a career. With over three years of experience in content writ Read more...