Ted Baker agrees takeover by US Reebok proprietor
- B2B Advice
- February 5, 2022
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Ted Baker has agreed a cut-price £211m takeover by the US group that owns Reebok and a stake in David Beckham’s clothes and merchandise empire.
The board of the retailer, which has greater than 500 outlets and concessions around the globe, has beneficial shareholders approve the buyout by Genuine Manufacturers Group (ABG).
The 110p-a-share deal for the London-listed vogue model, which has a market worth of £167m, is much beneath the 160p-a-share ABG was considering in Could as a number of potential suitors mulled bids.
Nevertheless, the worth of the deal is eighteen% larger than the closing value of Ted Baker’s shares – that are down 35% over the past 12 months – on Monday.
“The administrators of Ted Baker contemplate the phrases of the acquisition to be truthful and cheap,” the corporate mentioned in an announcement on Tuesday. “Accordingly, the administrators intend unanimously to advocate that Ted Baker shareholders vote in favour.”
Founder Ray Kelvin, who stepped down in 2019 after allegations of “compelled hugging” however retains an 11.5% stake within the firm, mentioned: “I’m uncertain if Ted Baker remains to be the corporate I as soon as knew, nonetheless I hope below new possession it should regain its id. At its core, Ted is a novel and really particular model born out of a love and keenness for what we do.”
It’s understood that Kelvin won’t be concerned within the privatised firm however he hinted at a possible future in vogue saying: “As onerous as leaving Ted has been, to today I really feel the identical ardour for design and product to do all of it once more.”
ABG has already secured irrevocable undertakings backing the deal from shareholders accounting for 50.7% of Ted Baker’s issued share capital, together with pursuits held by its administrators and Kelvin.
The retailer kicked off a proper gross sales course of in April after rejecting a collection of bids from the US personal fairness group Sycamore Companions and others.
In keeping with a inventory trade announcement made by Ted Baker in early June, “a most well-liked counterparty”, which had been invited to undertake confirmatory due diligence, had mentioned it now not supposed to proceed with a suggestion.
ABG, which is valued at $13bn (£10.8bn) after promoting a number of stakes to US personal fairness lately, has snapped up property together with Sports activities Illustrated journal, Juicy Couture, and types related to Muhammad Ali and Shaquille O’Neal, the boxing and basketball legends.
The corporate mentioned on Tuesday: “ABG intends to make use of its world community of established working companions with deep trade experience, along with its enterprise mannequin that mixes main model administration capabilities, to boost Ted Baker’s income and profitability throughout merchandise classes and geographic areas because it has for different acquired manufacturers together with Reebok, Brooks Brothers, Nautica and Eddie Bauer.
“ABG believes that Ted Baker is healthier suited to non-public possession, as it will facilitate a restructuring of the enterprise in an effort to maximise its future potential.”
In Could, Ted Baker reported a pre-tax lack of £38.4m within the 12 months to 30 January, down from £59.2m the 12 months earlier than.
Ted Baker’s shares collapsed in 2018 amid tough buying and selling circumstances for clothes manufacturers, and a scandal over a tradition of “compelled hugs” below its founder, Ray Kelvin, which led to his exit from the corporate.
The corporate was then hit by the emergence of an accounting error and a string of revenue warnings.
Ted Baker is trying a turnaround below its new boss, Rachel Osborne, who took over in 2020, after its core marketplace for fits and outfits for social occasions took successful throughout the Covid-19 pandemic.