Pure Beauty

Ted Baker rejects two takeover bids from New York’s Sycamore

By Becky Bargh | Published: 29-Mar-2022

American private equity is determined to add the beauty and fashion name to its portfolio – but that is not on Ted Baker’s agenda

Beauty and fashion brand Ted Baker has rejected two takeover bids from Sycamore Partners.

A statement by Ted Baker said that The New York-based company offered 130p for each Ted Baker share, which was rejected earlier this month.

This would value Ted Baker at £250m.

Sycamore submitted another application four days later, offering 137.5p per share.

The US private equity firm specialises in retail and consumer brand investments, and is thought to be in the running to buy out up-for-sale beauty retailer Boots.

Ted Baker’s Board is said to have “carefully reviewed both 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 as a listed company.

“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.”

Questions have now been asked whether Sycamore will raise its 7.5p inflated offer once again, or if a higher price tag will make Ted Baker less appealing.

Sycamore hit headlines in 2020 when the group attempted to back out of a takeover deal for L Brands’ Victoria’s Secret.

L Brands responded with a lawsuit and described Sycamore’s actions as “gamesmanship”.

The deal would have seen Sycamore buy a 55% stake in the Victoria’s Secret business, which was valued altogether at US$1.1bn.

Documents said that Sycamore wanted to back out of the deal because L Brands had “materially breached the agreement” by closing 1,600 Victoria’s Secret and Pink outlets due to Covid-19.

One week later, the two businesses agreed to “mutually” terminate the deal.

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