Authentic Brands is in pole position to buy Ted Baker

By

Sandra Halliday

Published
May 30, 2022

Ted Baker hasn’t officially announced the name of the preferred bidder to which it’s talking, but news has emerged that acquisition-hungry Authentic Brands Group (ABG) is the front-runner to clinch a £300 million deal to take the UK-based mid-market retailer private.

Not that any deal is assured and one weekend report also said ABG may pull its bid and spend its cash elsewhere.

Juicy Couture owner ABG has been sweeping up brands in recent years and its most recent mega-deals include buying Reebok, striking a New Guards deal for the brand, and buying control of David Beckham’s DB Ventures.

The company had been suggested as a possible Ted Baker bidder only last month and Sky News reported that it indicated it’s prepared to pay more than 150p a share for the business. 

Ted Baker’s shares were trading at less than 140p each on Monday morning, which was higher than Friday’s close but still short of ABG’s reported price level. That means it’s currently valued at just over £255 million.

That’s a lot higher than as recently as February when the shares changed hands for only around 80p each, but much, much lower than their all-time high in late 2015 when each share would set an investor back almost £29.

With ABG valued at almost $13 billion, Ted Baker would be a relatively small acquisition for it compared to one such as Reebok, which cost over €2 billion.

But despite its deep pockets, it’s not known for being prepared to over-pay to achieve its aims. Last year, for instance, its link-up with JD Sports to try to buy Topshop failed after it was outbid.

And, as mentioned, there has also been a report that ABG isn’t guaranteed to buy Ted Baker.

The Mail on Sunday said sources indicated the talks could take several weeks but the American giant “is said to be considering deals elsewhere” as well.

And while ABG operates internationally, its biggest focus is the buoyant US market. Ted Baker is available in the US but its own biggest market is the UK.

It’s unclear whether any other serious bidders are waiting in the wings should an ABG deal not happen. Private equity group Sycamore kicked off the bid race when it made several offers for the firm, valuing it at around £250 million. But Ted Baker rejected these as being too low and has continued to stress that it won’t sell at a knock-down price.