Sycamore makes £250m bid for Ted Baker

US private equity group Sycamore Partners has reportedly made a concrete offer for Ted Baker with news on Sunday that a bid has been tabled in the past few days.

That's according to Sky News, which said Sycamore has launched a 130p per share offer, valuing the business at £250 million. That's higher than the lows that the company reach in recent months, but well down from the £1.4 billion it was worth several years ago.

The shares had been as low as just over 80p back in February, but with bid rumours circulating, they closed at almost 126p on Friday. The Sycamore offer means they’re likely to rise first thing on Monday to 130p and possibly beyond.

A higher share price would suggest that investors currently think Sycamore will have to come up with more money to win the prize and the Sky News report also quoted City sources saying it was very unlikely that the board would back any bid at the current level.

It's not known, however, whether the offer has been formally rejected by the Ted Baker board.

Assuming it is rejected, under UK Takeover Panel rules, the private equity group will need to raise its bid before a mid-April deadline or walk away. There remains time for other potential bidders to emerge though.

In response to the original rumours earlier this month, Ted Baker had said it “continues to make good progress with its transformation and the company is emerging from Covid as a stronger and more financially sustainable business. The board is confident in the company's independent prospects and would evaluate any offer for the company against the strong shareholder value creation that it believes can be delivered as a standalone company”.

Ted Baker suffered a major fall from grace in recent years with issues both of its own making and caused by the pandemic. Once a high-flyer, it’s nonetheless a major name in UK fashion retailing and also has a presence globally. The company's current leadership clearly believes it can win back some of its prominence.

But the decision won't only be down to its CEO and board with founder Ray Kelvin still likely to be an influential voice as he retains a significant stake in the business.

Sycamore makes £250m bid for Ted Baker - report

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