# ABG-Robin BidCo cash offer for Ted Baker plc £211 million

- Link: https://www.directorstalkinterviews.com/abg-robin-bidco-cash-offer-for-ted-baker-plc-211-million/4121077739
- Published: 2022-08-16T07:11:37+01:00
- Author: Giles

**Summary**

**·         ** The boards of directors of **Authentic Brands Group, LLC** (“ABG”)
and **Ted Baker plc** (LON:TED) have today announced that they have reached agreement
on the terms of a recommended final cash offer by ABG-Robin BidCo (UK) Limited (
a newly incorporated entity wholly-owned by ABG) to acquire the entire issued and
to be issued share capital of Ted Baker. It is intended that the Acquisition will
be implemented by means of a Court-sanctioned scheme of arrangement under Part 26
of the Companies Act.

**·         ** Under the terms of the Acquisition, Ted Baker Shareholders will be
entitled to receive:

**110 pence in cash for each Ted Baker Share**

**·         ** The Acquisition values Ted Baker’s existing issued and to be issued
ordinary share capital at approximately £211 million and the price of 110 pence 
per Ted Baker Share represents a premium of approximately:

**·       ** 18.2 per cent. to Ted Baker’s share price of 93.10 pence at close of
business on 15 August 2022, being the last Business Day before the date of this 
announcement; and

**·       ** 11.4 per cent. to Ted Baker’s share price of 98.75 pence at close of
business on 17 March 2022, being the last Business Day before the Offer Period commenced.

**·          The Cash Consideration is final and will not be improved or revised,
except that Bidco reserves the right to improve or revise the Cash Consideration
if there is an announcement on or after the date of this announcement of an offer,
possible offer or firm intention to make an offer for Ted Baker by a third party
offeror or potential offeror other than ABG or Bidco.**

**·         ** If, on or after the date of this announcement and before the Effective
Date, any dividend, distribution or other return of value on the shares is announced,
declared, made or paid by Ted Baker or becomes payable by Ted Baker in respect of
the Ted Baker Shares, Bidco reserves the right to reduce the consideration payable
under the terms of the Acquisition for the Ted Baker Shares by an amount up to the
aggregate amount of such dividend and/or distribution and/or return of value on 
the shares. In such circumstances, Ted Baker Shareholders would be entitled to receive
and retain any such dividend and/or distribution and/or return of value on the shares.

**Recommendation**

**·         ** The directors of Ted Baker, who have been so advised by Evercore 
and Blackdown as to the financial terms of the Acquisition, consider the terms of
the Acquisition to be fair and reasonable. In providing their advice, Evercore and
Blackdown have taken into account the commercial assessments of the directors of
Ted Baker.

**·          Accordingly, the directors of Ted Baker intend unanimously to recommend
that Ted Baker Shareholders vote in favour of the Scheme at the Court Meeting and
the Resolutions to be proposed at the General Meeting as they have irrevocably undertaken
to do in respect of their own beneficial holdings of Ted Baker Shares (and/or those
Ted Baker Shares over which they have control) comprising 101,056 Ted Baker Shares
in aggregate, which represent approximately 0.1 per cent. of the issued share capital
of Ted Baker on 15 August 2022 (being the last Business Day before the date of this
announcement).**

**·          Bidco and/or ABG has received irrevocable undertakings to vote in favour
of the Scheme at the Court Meeting and the Resolutions to be proposed at the General
Meeting (or in the event that the Acquisition is implemented by way of a Takeover
Offer, to accept or procure acceptance of such offer) from certain Ted Baker Shareholders,
including the directors of Ted Baker, in respect of their entire beneficial holdings
of Ted Baker Shares (and/or those Ted Baker Shares over which they have control 
or the ability to control) comprising 93,658,711 Ted Baker Shares in aggregate, 
which represent approximately 50.7 per cent. of the issued share capital of Ted 
Baker on 15 August 2022 (being the last Business Day before the date of this announcement).**

**·         ** Further details of these irrevocable undertakings are set out in 
paragraph 6 of, and Appendix 3 to, this announcement.

**Background to and reasons for the Acquisition**

**·         ** ABG believes Ted Baker is a distinctive British lifestyle brand with
a rich, authentic heritage and strong worldwide customer recognition. As a leading
global brand management company, ABG believes it will be a good custodian of the
Ted Baker brand and is well positioned to accelerate its growth and enhance its 
value.

**·         ** ABG intends to use its global network of established operating partners
with deep industry expertise, together with its business model that combines leading
brand management capabilities, to enhance Ted Baker’s revenue and profitability 
across merchandise categories and geographic regions as it has for other acquired
brands including Reebok, Brooks Brothers, Nautica, and Eddie Bauer.

**·         ** ABG believes that Ted Baker is better suited to private ownership,
as this will facilitate a restructuring of the business in order to maximise its
future potential.

**·         ** After completion of the Acquisition, ABG intends to separate the 
Ted Baker business into: (i) an intellectual property holding company which would
remain controlled by ABG; and (ii) one or more operating companies which would manage
the physical retail, e-commerce and wholesale operations of the Ted Baker business.
ABG intends to explore options to transfer full or partial ownership and control
of some or all of such operating companies to partners with established operating
businesses.

**·         ** In particular, ABG believes there are significant growth opportunities
for the Ted Baker brand in North America given the Ted Baker brand’s strong consumer
recognition in this market. ABG owns 50 per cent. of SPARC Group LLC (“SPARC”) a
North American retail, e-commerce and wholesale operating joint venture alongside
Simon Property Group, a leading owner and operator of regional shopping malls and
outlet centres in North America. SPARC operates approximately 1,660 stores in North
America and has substantial e-commerce and wholesale activities. Whilst detailed
intentions and plans have not yet been formulated, in order to accelerate growth
and provide operating economies of scale, one of the options which ABG may explore
is the potential to enter into formal discussions to seek to combine Ted Baker Operations
in North America with those of SPARC.

**Information relating to ABG and Bidco**

**·         ** ABG is a leading global brand management company headquartered in
New York, which owns, manages, and seeks to elevate the long-term value of a global
portfolio of brands. During the past twelve years, ABG has acquired majority ownership
interests in over 50 consumer and entertainment brands.

**·         ** From Reebok to Nautica, Eddie Bauer to Spyder, and David Beckham 
to Sports Illustrated, ABG’s brands span the fashion & lifestyle, active & outdoor,
celebrity & entertainment, and sports sectors. Through over 300,000 points of sale
and over 8,500 retail stores and shop-in-shops, its brands collectively generate
over $21 billion in annual global retail sales.

**·         ** Bidco is a private limited company registered in England and Wales
and incorporated on 11 August 2022. Bidco was established for the purposes of making
the Acquisition and is an indirect wholly-owned subsidiary of ABG.

**Timetable and conditions**

**·         ** It is intended that the Acquisition will be implemented by means 
of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act (
although Bidco reserves the right to effect the Acquisition by way of a Takeover
Offer, subject to the consent of the Panel and the terms of the Co-operation Agreement).

**·         ** The Acquisition will be put to Ted Baker Shareholders at the Court
Meeting and General Meeting. The Court Meeting and the General Meeting are required
to enable Ted Baker Shareholders to consider, and if thought fit, to vote in favour
of the Scheme and the Resolutions to implement the Scheme. In order to become Effective,
the Scheme must be (i) approved by a majority in number representing not less than
75 per cent. in value of Scheme Shareholders (or each of the relevant classes thereof,
if applicable) present and voting and entitled to vote, either in person or by proxy,
at the Court Meeting (and at any separate class meeting which may be required or
any adjournment thereof), and (ii) sanctioned by the Court without modification 
or with modification on terms acceptable to ABG and Ted Baker. In addition, at the
General Meeting to implement the Scheme, the Resolutions must be passed by the requisite
majority or majorities of Ted Baker Shareholders. The General Meeting will be held
immediately after the Court Meeting.

**·         ** The Scheme Document will include full details of the Scheme, together
with notices of the Court Meeting and the General Meeting and the expected timetable
and will specify the action to be taken by Scheme Shareholders. It is expected that
the Scheme Document, containing further information about the Acquisition and notices
of the Court Meeting and General Meeting together with the Forms of Proxy, will 
be sent to Ted Baker Shareholders and (for information only) participants in the
Ted Baker Share Plans as soon as practicable and, in any event, within 28 days of
the date of this announcement (or such later date as may be agreed between Bidco
and Ted Baker with the consent of the Panel).

**·         ** Subject, among other things, to the satisfaction or waiver of the
Conditions, it is expected that the Scheme will become Effective during the fourth
quarter of 2022.

**Comments on the Acquisition**

> **Commenting on today’s announcement, Jamie Salter, Founder, Chairman and CEO 
> of ABG said:**
> “_Ted Baker is a highly regarded, uniquely British brand whose strong fashion 
> credibility resonates with consumers around the world. We are excited to build
> on the brand’s global foundation through a business model focused on licensing,
> wholesale, retail, digital and strategic marketing partnerships. Under ABG’s ownership,
> we believe that Ted Baker is poised for continued growth and success._“

> **Commenting on today’s announcement, Helena Feltham, Interim Chair of Ted Baker
> said:**
> “_In April 2022, after receiving a number of unsolicited bid proposals and having
> consulted with our major shareholders, the Ted Baker Board decided to launch a
> formal sale process to evaluate interest in the business. The process was thorough
> and attracted global interest._
> _Today, we are announcing an all-cash offer from ABG. The Ted Baker Board believes
> the offer, which is supported by Ted Baker shareholders with a majority of shares,
> 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 was founded by Ray Kelvin in 1987 and through imagination, creativity,
> innovation and a rigorous focus on product design and quality, it has grown into
> a unique British brand with a strong global presence. The Ted Baker Board would
> like to recognise and thank all those who have contributed to building the brand,
> including the management team and Ted Baker teams across the world._
> _The Ted Baker Board believes that ABG will be a strong and supportive owner of
> the business. We are confident that with ABG’s experience, reach and investment,
> the Ted Baker brand will be capable of achieving its long-term global potential_.”

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