Ted Baker's preferred suitor walks away, shares tumble

7th Jun 2022 07:50

(Sharecast News) - Ted Baker's preferred bidder has pulled out of takeover talks, sending shares in the fashion retailer tumbling.

The company, which put itself up for sale in April, said last month that it had selected a preferred bidder and due diligence was underway.

But on Tuesday, Ted Baker said it been informed last night that the counterparty no longer intended to proceed with an offer. No reason was given, although Ted Baker said it was not linked to the due diligence review.

The company said it had previously received a number of other non-binding proposals and would now decide whether to proceed with any of those.

But it acknowledged: "There can be no certainty that an offer will be made, not as to the terms on which any offer will be made."

As at 1000 BST, shares in Ted Baker were down 20% at 109.0p.

Ted Baker has not named the preferred bidder, but it was widely reported to be Authentic Brands, the US owner of Juicy Couture and Reebok. It was also reported that the two parties were discussing a bid of around 150p per share.

Victoria Scholar, head of investment at Interactive Investor, said: "It is no secret that UK high street retailers have been struggling in recent years amid the rise of e-commerce low price point competitors like Pretty Little Thing and Boohoo.

"Ted Baker already had a difficult time with another potential acquirer after US private equity firm Sycamore Partners issued three takeover proposals but eventually walked away, leading to a plunge in its share price.

"With record low UK consumer confidence, the cost of living crisis, the possibility of recession and shaky equity markets, it is understandable that Ted Baker is desperate for a buyer and explains why investors are shunning the stock this morning."