(Bloomberg) —
Ted Baker Plc’s board rejected two bids from private equity fund Sycamore Partners Management LP, the most recent one for about 254 million pounds ($334 million).
Sycamore offered 130 pence a share on March 18 and raised that to 137.5 pence a share on March 22, Ted Baker said Monday. The second bid was 9% higher than Friday’s closing price. The shares fell as much as 6.2% on Monday, erasing an initial gain.
“The share move makes this look more like a walkaway situation,” said Eleonora Dani, an analyst at Shore Capital in London, one of Ted Baker’s brokers. “Perhaps the market doesn’t think Sycamore will come back with a higher offer that will satisfy the board.”
Ted Baker said the company can boost its share price beyond those levels on its own via its turnaround plan. Chief Executive Officer Rachel Osborne has been seeking to revive Ted Baker by cutting debt and product markdowns, boosting online sales and refreshing the brand.
Sycamore is a New York-based fund that focuses on consumer and retail businesses, with about $10 billion in capital. The company said March 18 it was considering making an offer.
The shares, which have lost more than 90% of their value in the past four years. The company raised 105 million pounds by selling new shares in 2020.
If the company wasn’t on track to meet its targets, the board would be more likely to accept the offers, according to Dani.
“Perhaps this is not the best timing,” she said.
Bloomberg reported in January Sycamore was one of several firms considering a bid for Walgreens Boots Alliance Inc.’s international drugstore unit. Sycamore previously owned brands including Kurt Geiger and Nine West. Recently, it has reportedly also been targeting Kohl’s, a U.S. department store chain.
The retailer’s founder Ray Kelvin departed in 2019 after being accused of inappropriate hugs and other behavior in the workplace, which he denied. The company last month reported a 35% gain in fiscal fourth-quarter revenue.
Sycamore would have three key shareholders it would need to convince on a bid: Toscafund Asset Management, which owns a 27% stake; Kelvin, who has about 12% and Schroders Plc, which has 8.8%, according to data compiled by Bloomberg.
(Updates with analyst comment in third paragraph)
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