The US fashion and media group Authentic Brands Group LLC (ABG) is continuing its shopping spree. British clothing retailer Ted Baker Plc announced on Tuesday that its board of directors had unanimously approved a takeover bid from ABG. As part of the offer, the specially formed subsidiary ABG-Robin BidCo (UK) Limited will acquire all shares in Ted Baker. The existing shareholders should therefore receive 110 pence for each share certificate. This brings the total volume of the planned transaction to around 211 million pounds sterling, which is the equivalent of almost 251 million euros.
Jamie Salter, founder, chairman and CEO of ABG, justified the multi-million dollar acquisition: “Ted Baker is a highly respected, unique British brand whose strong fashion credibility resonates with consumers around the world,” he said in a statement . “We look forward to building on the brand’s global foundation with a business model focused on licensing, wholesale, retail, digital and strategic marketing partnerships.”
Ted Baker should benefit from the group’s global network
Under ABG’s leadership, Ted Baker has good prospects for “continued growth and success,” Salter said. The company should be able to draw on the “global network of proven operational partners” that the group has built up. ABG already owns numerous well-known clothing suppliers such as Forever 21, Juicy Couture, Eddie Bauer, Volcom and Aéropostale. The group of companies recently made headlines when it bought the Reebok brand from German sports goods manufacturer Adidas for 2.1 billion euros.
Upon closing of the transaction, which is subject to Ted Baker shareholders’ approval, ABG plans to split the fashion company. The group wants to directly control a holding company that holds the trademark rights. One or more operating companies, some or all of which may be managed by partner companies, are to take over the retail and distribution of Ted Baker. For example, consideration is being given to merging Ted Baker’s North American business with Sparc Group LLC, a retail joint venture in which ABG and real estate company Simon Property Group each have a 50/50 stake.
Months of takeover poker are about to end
The agreement that has now been announced will probably end the month-long takeover gamble surrounding Ted Baker, which began in March with the first, ultimately unsuccessful bids by the financial investor Sycamore Partners. The apparel company then initiated a formal sale process in early April that kept taking new turns. According to press reports, initial negotiations with ABG had failed in the meantime.
Ultimately, however, the management of Ted Baker, together with their advisors, assessed the offer as “fair and reasonable” and supported its acceptance by the current shareholders. They can look forward to a strong premium: ABG’s offer is 18.2 percent higher than Monday’s stock price, when Ted Baker shares were last traded for 93.1 pence. According to the company, important shareholders, who together hold more than half of the shares, have already declared their intention to accept the offer.