Ted Baker agrees to $254M Authentic Brands takeover

Ted Baker has agreed to a £211 million ($254 million) takeover by Authentic Brands Group, settling for a lower price than previous offers at higher valuations.

Why it matters: The price cut underscores how current market conditions have made it more difficult for companies shopping themselves around.

Details: ABG, which also owns Reebok, Nautica, Juicy Couture and Eddie Bauer, will give the British fashion chain's shareholders 110 pence a share, an 18% premium to the stock's Monday close.

What they’re saying: The offer “represents a fair value for shareholders and balances the company's growth prospects with the risks of the uncertain economic environment in which the business is operating,” Ted Baker said in a release.

Context: New York-based ABG had previously been in talks with Ted Baker and indicated it would be willing to pay a higher price before backing out, citing a “deterioration in the wider macroeconomic environment.”

Flashback: The London-based apparel retailer had opened a formal sale process after attracting significant interest from multiple bidders.

• That process was sparked by Sycamore Partners who earlier this year had approached the company several times with offers Ted Baker kept rejecting (at one point, the PE firm offered the company 137.5 pence a share).
• Sycamore eventually bowed out after Ted Baker said it had a preferred bidder (that suitor was Authentic Brands).

What’s next: ABG plans to split Ted Baker’s business into an IP-holding company that will be controlled by ABG and various operating companies that would branch out the business into physical retail, e-commerce and wholesale operations.

• The latter could be transferred or sold to partners.
• Ted Baker’s shares rose more than 16% Tuesday morning.