Ted Baker Plc (LON:TED) shares dropped over 20% on Tuesday after announcing that its first-choice suitor was no longer making an offer, which pushed the fashion retailer to contemplate other alternatives.
Authentic Brands backs down on the acquisition of Ted Baker
According to Ted Baker, the favored buyer, Authentic Brands, which owns Forever 21 and Juicy Couture, suggested that its choice was not based on due diligence examination.
The London-listed retailer made itself available for sale in April 2022. However, following a flurry of amended offers and the withdrawal of private equity firm Sycamore, it chose its top suitor to move the process further in late May.
Investment head at the interactive investor online platform Victoria Scholar said:
With record-low UK consumer confidence, the cost-of-living crisis, the possibility of a recession and shaky equity markets, it is understandable that Ted Baker is desperate for a buyer.
Ted Baker, which is renowned for its shirts, suits, and dresses, is undergoing a turnaround and forecasted sales growth in the following months with demand for leisure and officer apparel recovers.
According to a recent Sky News report, Authentic Brands reportedly wanted to pay over 150 pence for each Ted Baker share. Ted Baker declined Sycamore’s persistent advances in March when it suggested a sale for 137.5 pence for each share, or over £250 million ($312.6 million).
The private equity group later took part in the first phase of the company’s sale procedure before withdrawing, and it is unknown whether it will return to the auction.
Outside of work hours, representatives from Authentic Brands and Sycamore in the US were unavailable for comment.
Ted Baker’s value has plummeted following the resignation of the CEO
Acquisition rules do not force Ted Baker, which went public in 1997 as No Ordinary Designer Label, to divulge the identities of possible buyers throughout this process officially.
Following the resignation of former Chief executive Ray Kelvin in 2019 after harassment claims and the disclosure of accounting fraud in 2020, the company’s market cap has plummeted in recent years.
Kelvin has rejected the charges and currently owns over 12% of the business he began as a solitary shirt expert in Glasgow, Scotland, in 1988.
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