(Reuters) -Ted Baker’s share price fell by more than 20 percent on Tuesday after the firm announced that its preferred acquirer had decided not to submit an offer, forcing the British fashion retailer to seek alternative options.
Ted Baker said that the preferred bidder, Authentic Brands, which owns Juicy Couture and Forever 21, said that its decision was not based on its due diligence investigation.
The London-listed chain put itself up for sale in April, and at the end of May, after a flurry of revised offers and Sycamore pulling out of the process, it chose its favourite suitor.
“With record-low consumer confidence in the UK, a problem with the cost of living, the risk of a recession, and unstable financial markets, Ted Baker is understandably desperate to find a buyer,” said Victoria Scholar, head of investment at the online platform interactive investor.
Ted Baker is known for its suits, shirts, and dresses. The company is currently working on a plan to turn things around, and in May, it predicted that sales would be good in the coming months as demand for clothing for work and play picked up.
The previous month, Sky News reported that Authentic Brands was willing to pay more than 150 pence per Ted Baker share.
Ted Baker repeatedly rejected Sycamore’s March offer to purchase the company for 137.5 pence per share, or more than 312.6 million pounds.
It is unknown whether the private-equity group will resume the bidding process after withdrawing from the initial phase of Ted Baker’s sale process.
Representatives from US-based Authentic Brands and Sycamore could not be reached right away for comment after business hours.
Ted Baker went public in 1997 as No Ordinary Designer Label. At this time, takeover laws do not require Ted Baker to say who might be interested in buying the company.
At 09:54 GMT, its shares had fallen as much as 24% to 103.4 pence. In 2015, Ted Baker shares peaked at 29.72 pounds per share.
The market value of the company has dropped a lot over the past few years, especially after former CEO Ray Kelvin left in 2019 amid allegations of wrongdoing and the company revealed an accounting problem in 2020.
Kelvin has rejected the charges and continues to hold about 12 percent of the company that he began in 1988 as a single-store shirt expert in Glasgow, Scotland.
$1 equals 0.7997 pounds.
