The US consumer goods group that owns Reebok and is interested in David Beckham’s branded product portfolio is about to unveil its acquisition of Ted Baker, a London-listed fashion retailer for less than $200. million pounds.
Sky News has learned that Ted Baker’s board is preparing to propose a 110 percent stock purchase offer from Authentic Brands Group (ABG), run by prominent businessman Jamie Salter.
Sources close to the retailer said an announcement of a deal could come as early as Tuesday morning.
If confirmed, the offer from ABG would be almost a third below the price of around 160p per share it was set to offer in recent May.
Still, it would represent a premium of about 20% over Ted Baker’s closing price on Monday of 93.1 points, with the stock up from more than 69 points in early July.
The reduced prices ABG seems willing to pay for one of the UK’s most popular retailers reflects the dark sentiment towards high street brands in the UK economy being hit by inflation. amid fears of an impending recession.
According to a stock exchange announcement issued by Ted Baker in early June, “a preferred counterparty” who has been invited to conduct validation has announced that it no longer intends to continue the offering.
The preferred contractor is ABG, Sky News previously reported.
Because Ted Baker is conducting a formal sales process, the Takeover Board rules that prohibit an offer from returning with a new bid within six months do not apply.
ABG is reportedly drawn to Ted Baker’s international potential as well as possible synergies from the US-based company’s portfolio of brands, which includes Sports Illustrated, Juicy Couture, and other brands. brand associated with Muhammad Ali and Shaquille O’Neal, boxers. and the corresponding basketball legend.
The US company has been valued at nearly $13 billion after selling a “significant stake” to CVC Capital Partners, Six Nations Rugby shareholders and HPS Investment Partners.
ABG’s valuation has skyrocketed in recent years, after reportedly selling a controlling stake in August 2019 to a division of BlackRock, the world’s largest asset manager, for $870. million dollars.
Its other shareholders include acquirers General Atlantic and Lion Capital, and GIC, Singapore’s sovereign wealth fund.
In addition to Mr Beckham’s brands division, Ted Baker will represent ABG’s most prominent British takeover to date.
Last year it teamed up with JD Sports Fashion to buy TopShop from the wreckage of Sir Philip Green’s fashion conglomerate, Arcadia Group, but was outbid by ASOS, the online retailer.
Ted Baker was brought into play by a series of takeover proposals submitted by Sycamore Partners, an American private equity firm that rejected the semi-formal process in May.
Sycamore has filed three takeover proposals, the first two of which value Ted Baker at 130p a share and 137.5pa-share.
Ted Baker is slowly recovering from a tumultuous period that saw the company’s stock drop more than 90% following the disclosure of accounting problems and the departure of its founder, Ray Kelvin.
In May, it said its pre-tax annual underlying loss had fallen from £59.2 million in the year to January 30, 2021, to £38.4 million over the next 12-month period.
Despite having a modest market capitalization of just £159 million, Ted Baker still occupies a prominent place in the UK fashion retail industry.
It trades from hundreds of independent and franchised stores globally and employs thousands of people.
Ted Baker’s bad times began in 2019 when Mr Kelvin left amid allegations of inappropriate behavior with a female colleague.
Since then, it has been plagued by profit warnings, accounting risks and forced to tackle the COVID-19 pandemic from financial weakness.
In 2020, it cut hundreds of jobs and raised £100m to bolster its balance sheet.
Mr. Kelvin remains an important shareholder in the business.
Ted Baker is being advised by banks including Evercore Partners, while ABG is said to have been advised by Bank of America on the deal.
On Monday night, Ted Baker declined to comment, while ABG has been contacted for comment.