LONDON — Ted Baker confirmed Monday that it knocked back two takeover bids from Sycamore Partners earlier this month because they “significantly undervalued” the brand, and its potential as a publicly listed company.
Sycamore’s first bid, for 1.30 pounds a share, was met with rejection. It later raised the offer to 1.375 pounds, an increase of 5.8 percent, but that was also dismissed by Ted Baker’s board.
In a statement to the London Stock Exchange, Ted Baker described itself as a “leading global brand with a strong future. The management actions taken over the last two years have put the business on firm footing, and it is now well on the way to recovery following a turbulent period.”
The board said it has been focusing “on delivering value for Ted Baker’s shareholders well in excess of the price offered by Sycamore. There can be no certainty that any firm offer for the company will be made, nor as to the terms on which any firm offer might be made. Shareholders are urged to take no action at this time.”
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Ted Baker described the two bids as “unsolicited” and “non-binding” and said the first proposal was made on March 18, followed by the second on March 22.
Ted Baker said the board carefully reviewed both of Sycamore’s proposals with its advisers “and concluded they significantly undervalued Ted Baker, and failed to compensate shareholders for the significant upside that can be delivered by Ted Baker as a listed company.”
As reported, Sycamore officially revealed its interest in a potential deal with Ted Baker in a U.K. regulatory filing earlier this month. A voracious acquirer, Sycamore is also said to have recently shown interest in buying the activist-pressured Kohl’s Corp.
U.K. rules require that Sycamore either move ahead with an offer or drop it and move on by April 15.
After Sycamore confirmed its interest on March 18, Ted Baker’s shares shot up 17.1 percent to 1.16 pounds, for a market capitalization of 232.2 million pounds. Following the news of the rejected bids, the shares were down 3.1 percent to 1.22 pounds in late afternoon trading on Monday.
The company was founded by Ray Kelvin in 1988 in Glasgow, and from a base on the British high street developed a global presence. Kelvin resigned as chief executive officer in 2019 amid allegations of misconduct and inappropriate physical contact with staff.
Kelvin always denied the allegations, which had been reported by members of staff on the website Organise.
The past few years haven’t been easy for Ted Baker. Following Kelvin’s resignation, the company went on to face a series of crises, including a string of profit warnings, accounting and management troubles and a revolving door of top managers.
In 2020, John Barton took over as non-executive chairman of Ted Baker, while Rachel Osborne was promoted to the role of CEO. Formerly, Ted Baker’s chief financial officer, Osborne was the third person in 12 months to hold the CEO role at the company.
Barton died suddenly in December, and the company has been without a chairman since then.
The company has made improvements in recent years, with fourth-quarter sales in fiscal 2022 climbing 35 percent year-over-year, according to a trading update last month. The company will report its results for the 52-week period ended Jan. 29 in May.
In the 2021 fiscal year, the company reported 352 million pounds in revenue, an operating loss of 98.9 pounds, and after-tax loss of 86.4 million pounds.