The retail company Authentic Brands Group, which owns brands like Juicy Couture, Reebok, and Forever 21, has reportedly struck a $254 million deal to acquire the U.K. clothing retailer Ted Baker.
With 110 pence paid in cash in return for each Ted Baker share, the purchase price would represent a premium of nearly 18% to the stock's closing price this week.
Ted Baker has stated that the company's board will unanimously recommend to shareholders that the purchase be approved.
Following completion, ABG stated that it aims to split the Ted Baker business into a private equity firm for intellectual property that would continue to be under its control and one or more operating companies that would run the brand's retail locations, e-commerce business, and wholesale operations.
ABG also said that it will look at options for giving other partners full or partial ownership and management of some or all of those independent operating entities.
After having to put itself up for sale earlier this year owing to challenges brought on by the Covid pandemic, the British fashion label has finally made a formal announcement, putting an end to months of ambiguity over its future.
Before initiating its own selling process, Ted Baker rejected a number of offers from the venture capital network Sycamore Partners. ABG was one of the entities to negotiate a deal with Ted Baker previously, which fell through.
Earlier this week, the CEO and creator of ABG, Jamie Salter, stated that through a business strategy centered on licensing, wholesale, retail, digital, and strategic marketing alliances, the company is eager to expand the brand's worldwide base.
With inflation prevailing and customers cutting down on their expenditures on other nondiscretionary things, Ted Baker is also in the middle of its own restructuring initiatives and aims to profit from the sustained strength of the premium market.
More mergers and acquisitions have taken place in the luxury retail industry as a result of the sector's growth, and the weakness of the pound has made British businesses more accessible to foreign investors.
Source Credit: https://www.cnbc.com/2022/08/16/reebok-owner-authentic-brands-strikes-254-million-deal-for-ted-baker.html