The US-based brand licensing empire which includes Reebok and a controlling stake in David Beckham’s consumer goods stable is exploring a takeover bid for Ted Baker, the London-listed fashion chain.
Sky News has learnt that Authentic Brands Group (ABG), which was recently valued at nearly $13bn (£10.1bn), is among several parties who have been in discussion with Ted Baker’s financial advisers in recent weeks.
City sources said this weekend that a deadline for non-binding indicative offers for the company passed on Thursday, and that ABG was understood to be part of that process.
ABG, which is run by the billionaire businessman Jamie Salter, is a global brand development and entertainment company which owns Sports Illustrated magazine, brands associated with Muhammad Ali and Shaquille O’Neal, the basketball legend, and fashion labels such as Juicy Couture.
Insiders said ABG was not certain to table a formal offer for Ted Baker, but that it was among a number of companies exploring whether to do so as part of a formal sale process which kicked off earlier this month.
Ted Baker has been put in play by a string of bid approaches – revealed by Sky News – from Sycamore Partners, an American private equity firm.
Sycamore has lodged three takeover proposals, the first two of which valued Ted Baker at 130p-a-share and 137.5p-a-share – equivalent to roughly £250m.
The value of the third offer was undisclosed, but the retailer has since confirmed Sycamore’s intention to participate in the formal auction.
It was unclear this weekend whether any bid from ABG, if it materialises, would be made alone or in conjunction with a partner, as was the case when it teamed up with JD Sports Fashion to try to acquire TopShop from the ruins of Sir Philip Green’s fashion group, Arcadia.
TopShop was eventually snapped up by ASOS, the online clothing retailer.
ABG’s valuation has soared in recent years, after reportedly selling a controlling stake in August 2019 to a division of BlackRock, the world’s biggest asset manager, for $870m.
Its other shareholders include the buyout firms General Atlantic and Lion Capital, and GIC, the Singaporean state investment fund.
Last November, it said it was selling “significant equity stakes” to CVC Capital Partners, the Six Nations Rugby shareholder, and HPS Investment Partners in a transaction valuing it at $12.7bn.
Mr Salter’s interest in a potential acquisition of Ted Baker is logical as the London-listed brand continues its recovery from a tumultuous period which saw its shares collapse by over 90%.
Ted Baker recorded sales growth of 35% last year, and said this month that it was “well-positioned to create significant value for shareholders”.
It said the initial phase of its formal sale process would be based on public information and focus “on those parties who understand and value the full potential of this unique brand”.
A second stage would involve “a select number of parties”, it added.
Despite its modest market capitalisation, Ted Baker occupies a prominent place in UK fashion retailing.
It trades from hundreds of standalone shops and concessions globally, and employs thousands of people.
Ted Baker has endured a torrid period in recent years, particularly in 2019 when founder Ray Kelvin left amid claims of inappropriate behaviour towards female colleagues.
Since then it has been hit by profit warnings, accounting mishaps and was forced to address the COVID-19 pandemic from a position of relative financial weakness.
In 2020, it axed hundreds of jobs and raised £100m to shore up its balance sheet.
Like other fashion retailers, it is now wrestling with the challenges posed by soaring inflation, higher energy costs and waning consumer confidence.
Mr Kelvin remains a significant shareholder in the business.
Last weekend, The Sunday Times reported that he was backing Sycamore’s efforts to take Ted Baker private, although he is understood to be likely to back the highest offer for it, regardless of its source.
Evercore and Blackdown Partners are advising Ted Baker, while Sycamore is being advised by Numis.
It is unclear whether ABG has hired an adviser.
Shares in Ted Baker closed on Friday at 147.8p, valuing the company at £273m.
