Ted Baker blinked and it now is on track to have a new owner.
After a series of on-and-off negotiations that have dragged on for months, Authentic Brands Group is expected to reveal Tuesday morning that it has signed a deal to purchase the U.K.-based brand for 110 million pence a share, or around $254 million in total, a price that is about one-third lower than the 160 pence a share the company had originally expected to bring.
An announcement of the impending deal is expected at the opening of the London Stock Exchange, where Ted Baker is listed.
According to sources, ABG was close to signing a deal for the company earlier this year but walked away in June after its due diligence revealed the financials were not what it had expected. “It was messy and they had to adjust the purchase price for it to make sense,” one source close to the negotiations said.
Ted Baker put itself up for sale earlier this year, and said that there were a number of interested parties that had submitted non-binding proposals, including Sycamore Partners and Bluestar Alliance in addition to ABG. In late May, Ted Baker said it had selected its “preferred counterparty” to pursue further due diligence and said Sycamore was no longer participating.
As reported, at the end of May Ted Baker narrowed its pretax losses in fiscal 2022 to 44.1 million pounds from 107.7 million pounds in the previous year. Group sales in the first quarter of the year were up 20 percent compared with last year, although they are 37 percent lower than the corresponding period in 2020.
The company said it had an “encouraging” start to the second quarter, with improvement in sales trends in the U.K. and European Union. The North America retail business, however, has been “adversely impacted” by product availability and disruption following the transition to the e-commerce platform.
For ABG, an acquisition of Ted Baker fits squarely into its wheelhouse. The brand operates worldwide and has the opportunity to sign a variety of licenses around the globe.
ABG recently finalized its 2.1 billion-euro purchase of Reebok and partnered with David Beckham to co-own and manage his business. It also owns Brooks Brothers, Nautica and a number of other high-profile brands and the rights to personalities ranging from Marilyn Monroe to Muhammad Ali. ABG’s value now exceeds $21 billion as measured by annual retail sales.