Ted Baker says Sycamore still interested in bidding for the business
When it made several unsolicited offers to buy a Ted Baker, private equity group Sycamore Partners may have hoped to pick up the UK fashion business on the cheap. But it's now likely to have to pay much more than it hoped as it continues to take part in the bidding process.
Ted Baker said in a stock exchange statement on Wednesday that Sycamore has indicated it’s still interested in being part of the formal sale process, despite speculation that it might drop out now that the company has officially put itself up for sale and the price is therefore likely to rise.
The statement said: “Further to the announcement made on 4 April 2022, Ted Baker PLC confirms that Sycamore Partners Management LP will participate in the formal sale process. As such, Sycamore is no longer required [under stock exchange rules] to announce, by no later than 5.00 pm on 15 April 2022, either a firm intention to make an offer for Ted Baker or that it does not intend to make an offer.”
Ted Baker remains in turnaround mode having been working hard to recover from a series of problems both caused by the pandemic and by missteps of its own. But the company seems to be on the right track.
Despite its share price plummeting from the highs of 2015 when each share traded at almost £28, it clearly retains some appeal for private equity groups looking to profit from its recovery.
A few weeks ago, Ted Baker said it had rejected two successive unsolicited offers from Sycamore as they undervalued the business. But it also received an “improved proposal” from the group, as well as “other unsolicited third-party bid interest”.
It didn't disclose what the third offer from Sycamore added up to, but earlier reports said the group had initially offered £1.30 per share offer, valuing the business at £250 million.
The company's share price has struggled in recent years and was hit hard by the pandemic, falling as low as a little over 70p during 2020. However, the share price had recovered somewhat, but was still only at 80p in February. It subsequently began climbing and the Sycamore news sent it higher still. The shares were trading at around £1.50 each on Wednesday morning, valuing the entire business at almost £272 million.
It's still not known who else is interested in buying the company and whether any other retailers might be prepared to throw their hats into the ring.
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