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Ted Baker's thumbs down on takeover offer

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Illustration: Megan Robinson/Axios

British apparel brand Ted Baker (LSE: TED) said it rejected two unsolicited proposals from PE firm Sycamore Partners because they both significantly undervalued the company.

  • The company's shares were down about 2.5% in afternoon trading today.

Why it's the BFD: Any time Sycamore makes a play for a retailer it's news, given its reputation for hard-charging turnarounds of struggling consumer brands.

Details: On March 18 the PE firm made its first offer of 130 pence (GBP 1.30), valuing the company at £250 million.

  • After Ted Baker turned it down, Sycamore came back with a second offer of 137.5 pence (GBP 1.375).
  • Sycamore is working with investment bank Numis, according to Sky News, which first reported Sycamore's interest.
  • Sycamore is also weighing bids for Boots and Kohl's.

What they're saying: "The management actions taken over the last two years have put the business on a firm footing and it is now well on the way to recovery following a turbulent period," the company said.

The bottom line: Ted Baker's board said it believes the company has a plan that will achieve a higher share price than what Sycamore is offering.

  • Buckle up. Sycamore doesn't take "No" very easily for an answer.
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