Ted Baker agrees to cash offer from Authentic Brands Group

British lifestyle retailer Ted Baker has announced it has reached an agreement on the terms of a recommended final cash offer by a newly incorporated entity of Authentic Brands Group (ABG).

UK-based ABG-Robin BidCo could be set to acquire the entire issued and to be issued share capital of Ted Baker, which will be implemented through a court-sanctioned arrangement under the Companies Act.

The total acquisition is valued at around 211 million pounds, with Ted Baker’s shareholders to receive 110 pence in cash for each share.

In a release, the retailer, which was advised by Evercore and Blackdown, said the Cash Consideration is final and will not be improved or revised unless Bidco deems it necessary in the case of an offer by another third party.

Ted Baker has recommended that its shareholders vote in favour of the scheme and its proposed resolutions at a Court Meeting and General Meeting, at which at least 75 percent of shareholders must approve of the proposal.

According to the retailer, its directors and certain other shareholders, representing around 50.7 percent of its shares, have already voted in favour of the cash offer.

Interim chair of Ted Baker, Helena Feltham, commented: “Today, we are announcing an all-cash offer from ABG.

“The Ted Baker board believes the offer, which is supported by Ted Baker shareholders with a majority of shares, represents a fair value for shareholders and balances the company's growth prospects with the risks of the uncertain economic environment in which the business is operating.

“The Ted Baker board believes that ABG will be a strong and supportive owner of the business. We are confident that with ABG's experience, reach and investment, the Ted Baker brand will be capable of achieving its long-term global potential."

Ted Baker to potentially become privately owned

Additionally, ABG, which owns the likes of Reebok and Juicy Couture, also said it believes it will be a “good custodian” of the brand and “is well positioned to accelerate its growth and enhance its value”.

The group added that Ted Baker is better suited to private ownership, which could potentially facilitate its restructuring to maximise its future potential.

Like its process with other acquired brands, ABG is looking to use its global network to enhance revenue across merchandise categories, with the further intention to separate the Ted Baker business into an intellectual property holding company controlled by ABG and one or more operating companies managing retail and wholesale operations.

ABG also said it had recognised significant growth potential for Ted Baker in North America, where the group owns 50 percent of retail and wholesale joint venture Sparc Group, with ABG further stating a partnership could be a future option.

While the acquisition will still be subject to the satisfaction of the conditions, the duo expect that the Scheme will become effective during the fourth quarter of 2022.