Ted Baker rejects £250m bid from US private equity firm Sycamore

Ted Baker has rejected the approaches of US private equity giant Sycamore, as it backed its strategy to bounce back from the pandemic over the offer on the table.

The retailer said it rejected a 137.5p-per-share bid last Tuesday, just days after it had sent a lower 130p bid packing.

Even the higher bid, worth around £254 million, undervalues Ted Baker, whose shares were trading as high as 2,500p just four years ago.

The company was hammered by the pandemic, but it had also gone into Covid in a weak spot following years of decline.

Most notably founder and chief executive Ray Kelvin stepped away from his position after accusations of inappropriate behaviour.

Mr Kelvin is still a major shareholder in the business.

The company said: “The board of Ted Baker 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.

“Ted Baker is a leading global brand with a strong future. The management actions taken over the last two years have put the business on a firm footing and it is now well on the way to recovery following a turbulent period.

“The board is focused on delivering value for Ted Baker’s shareholders well in excess of the price offered by Sycamore.”

Hargreaves Lansdown equity analyst Laura Hoy said: “It’s unsurprising that management’s not keen to give up the reins after a few difficult years.

“We’re finally starting to see some greens shoots from the group’s turnaround efforts now that formal occasions are back on the social calendar.

“However there’s still a bumpy road ahead, with inflation weighing on customers’ willingness to shell out for a new outfit.

“Ted’s prices are on the higher end of the spectrum, but not quite reaching into luxury, meaning its customers won’t be immune to the cost-of-living squeeze and could start to slide down the value chain.”