Reebok’s Parent Company Authentic Brands Group Agrees to pay $254 million for the Ted Baker Fashion Brand

Reebok owner Authentic Brands Group agrees to pay $254 million for the Ted Baker fashion brand.

Reebok owner and retail corporation, Authentic Brands Group, which also owns Forever 21, and Juicy Couture, has agreed to buy Ted Baker in the United Kingdom for approximately £211 million or $254 million.

The payout ratio, which would pay 110 pence in cash for each Ted Baker share, represents a nearly 18% premium over the company’s closing price on Monday. The firm is traded on the London Stock Exchange.

Ted Baker stated that the board of directors will unanimously recommend that shareholders vote in favor of the transaction.

Just after the closing of the transaction, ABG stated that it aims to split the Ted Baker business into an intellectual property holding company that will remain under ABG’s control, as well as one or more operating companies that will oversee the brand’s warehouses, e-commerce operations, and wholesale business.

ABG also noted that it will look into the possibility of transferring full or partial ownership and control of some or all of the separate operating companies to other partners.

The British fashion label was obliged to put itself up for sale earlier this year due to challenges associated with the Covid outbreak, which led to months of speculation about its future. Tuesday’s announcement puts an end to that.

Before starting its own sale process, Ted Baker turned down a number of offers from the private equity network Sycamore Partners. Before walking away, ABG had already discussed a deal with Ted Baker.

The founder and CEO of ABG, Jamie Salter, stated in a statement released on Tuesday that people around the world have great regard for the Ted Baker brand.

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, he said.

Even while inflation is still there and consumers are cutting down on their spending on other nondiscretionary things, Ted Baker is also in the midst of its own recovery initiatives and aims to profit from the sustained strength of the premium demand.

More mergers and acquisitions have taken place in the luxury retail industry as a result of the sector’s growth, and the weak pound has made British businesses more accessible to foreign investors.