Ted Baker on Monday officially put itself up for sale after at least two bidders expressed interest in the British high street fashion retailer.
The troubled men’s and women’s wear chain is in the middle of a three-year transformation attempt focused on slashing jobs and trying to operate sustainably in the wake of Covid-19 disruption.
Last month, Sycamore Partners Management said it was in the “early stages of making a possible cash offer” for the retailer. The U.K. arm of U.S.-based private equity firm Sycamore Partners has until April 15 to definitively state whether it will bid or walk away, per British regulations.
Ted Baker said last week that it received two unsolicited non-binding proposals from the American private equity firm, and rejected both “on the basis that they significantly undervalued” the company.
“Ted Baker has now received an improved proposal from Sycamore. Since Sycamore’s announcement of a possible offer for Ted Baker, the company has also received other unsolicited third party bid interest in relation to the company,” it added.
The retailer didn’t name the second bidder. And one of the bids from Sycamore is believed to be in the range of 250 million pounds to 255 million pounds ($327.8 million to $334.3 million). That non-binding offer was rejected by Ted Baker, and was followed up by the third, slightly improved, non-binding offer.
“Despite the impact of Omicron on the fourth quarter of the year to [Jan. 29, 2022], Ted Baker delivered group sales growth of 35 per cent. compared with last year, and trading margin improved strongly demonstrating the progress the company is making in re-establishing its premium brand positioning. Ted Baker has a strong balance sheet, with a net cash position at year end, and ample liquidity headroom to continue to grow,” the retailer said.
“In view of the interest expressed by potential offerers, and having consulted its major shareholders, the board has decided to conduct an orderly process to establish whether there is a bidder prepared to offer a value that the board considers attractive relative to the standalone prospects of Ted Baker as a listed company,” it added.
Evercore and Blackdown Partners are financial advisors for the sale process. Ted Baker said its targeted process will include a first phase for the submission of non-binding offers. Once received, a select number of parties will be “invited to participate in a second phase,” where they will be required to enter into a non-disclosure agreement and standstill arrangement.
Ted Baker also said it has not yet had any discussions with Sycamore, and that its terms of the formal sale process was made “without the consent of Sycamore.” Further, if Sycamore elects not to participate in the formal sale process, the British retailer said it still will be bound by the April 15 deadline where it will need to confirm whether it will make an offer or walk.
“The board of Ted Baker reserves the right to alter or terminate the process at any time and in such cases will make an announcement as appropriate. The board of Ted Baker also reserves the right to reject any approach or terminate discussions with any interested party at any time,” the retailer said.
Ted Baker operates over 550 stores and concessions. The high street retailer reported a 107.7 million pound pre-tax loss ($151.9 million) in 2020. Operating under CEO Rachel Osborne, the retailer is believed to in a better position now that many economies are dropping Covid restrictions.