Ted Baker is in sights of private equity bidder

Ted Baker is still focused on its turnaround programme so the last thing it needs is the distraction of dealing with a private equity bid. But it might have to do just that, with reports that US-based Sycamore Partners is working with advisers on a potential offer.

That’s according to Sky News, with its report driving the firm’s shares up over 8% by close of trading on Thursday. They edged up further in early Friday trading, but the company still only has a market capitalisation of just under £170 million. Its shares are valued at less than 92p each. That’s a far cry from its glory days in 2015 when they were changing hands for more than £27 each.

Sycamore is believed to have not yet made a formal approach but is understood to be considering such a move. It wouldn’t be the first fashion-linked and UK-based investment for the American group with Sycamore being a retail specialist that previously owned Kurt Geiger.

It has also been linked to a $9 billion bid for US department store chain Kohl’s and had at one point been rumoured to be looking at a possible Boots buy.

While the firm is said to have already hired an investment bank to advise on any Ted Baker deal, there’s still no certainty that an offer will emerge.

Ted Baker is vulnerable to takeover approaches as its shares have fallen sharply form their highs of less than a decade ago and the past year has seen a roughly 20% drop.

Any bidder would likely have to pay a premium to get their hands on the business that is a major name in UK retail and also trades internationally with thousands of concessions around the world.

As mentioned, the firm is still focused on its turnaround after a raft of issues including an internal scandal linked to its founder, accounting mistakes, and the pandemic. It also lost its respected chairman John Barton who died last year.

But the recovery seems to be starting, with recent sales figures showing an upturn in the 12 weeks to the end of January.

Ted Baker is in sights of private equity bidder - report

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