The London-based fashion brand Ted Baker is set to be acquired by Authentic Brands Group (ABG). It is expected that early next week ABG will announce that it has signed a deal to buy the U.K.-based brand for 110 million pence a share, or around USD 203 million in total. This valuation is approximately one-third lower than its original expectation of 160 pence a share.
According to WWD, the deal is expected to be announced at the London Stock Exchange opening. ABG withdrew from the race to acquire the fashion firm months ago. Earlier this month, Ted Baker announced that its “preferred counterparty” would no longer offer to acquire the company.
Ted Baker announced in late May that it had selected a party to proceed with a sale. While ABG was never named by Ted Baker, Sky News reported in April that the brand was engaged with multiple parties regarding a possible sale. ABG was among other companies exploring its options, but it was unclear if it had made a formal offer.
“The counterparty indicated that its reason for not proceeding was not linked to its due diligence review of the company,” said Ted Baker in its May statement, explaining that other non-binding proposals were being scrutinized.
Ted Baker announced in April that the company was considering selling itself. Moreover, the company received two unsolicited non-binding acquisition proposals from Sycamore Partners, which were rejected because they each “significantly undervalued” the company.
According to Ted Baker, Sycamore made an improved offer, and another party made a third offer. In its statement, Ted Baker said it will limit its engagement to those companies that are aware of the full potential of its unique brand.
In fiscal 2022, Ted Baker narrowed its pretax losses to GBP 44.1 million from GBP 107.7 million the previous year. However, sales were 37 percent lower than the corresponding period in 2020 despite an increase of 20 percent compared to last year.
In the second quarter, the company reported an “encouraging” start with improvements in the United Kingdom and European Union. Due to product availability issues and disruptions following the transition to the e-commerce platform, North America retail has been negatively impacted.
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Among ABG’s brands are Forever 21, Barneys New York, J.C. Penney, Reebok, Muhammad Ali, Shaquille O’Neal, Marilyn Monroe, and David Beckham’s global brand. As measured by annual retail sales, ABG has a value of over 21 billion USD.