// Ted Baker poised to launch a share placing and open offer to target roughly £80m
// This is equivalent to its current stock market value
// Ted Baker could launch it on Monday after consulting with leading shareholders
Ted Baker is reportedly planning to launch a share sale worth its market capitalisation as it becomes the latest retailer seeking cash to survive the Covid-19 pandemic.
According to Sky News, the fashion retailer is set to unveil a placing and open offer to target roughly £80 million – its current stock market value – from the sale of new shares.
It’s thought that the share placing and open offer could launch as soon as Monday morning and is reportedly close to proceeding with it after consulting with leading shareholders.
Ted Baker’s biggest shareholder is Ray Kelvin, who quit as chief executive in March last year in the wake of a scandal around allegations of “forced hugging” and other inappropriate behaviour.
Other major investors in the retailer include Schroders, Columbia Threadneedle and Toscafund.
Since Kelvin’s departure, Ted Baker has been plagued with a string of profit warnings, internal governance upheavals, a significant stock overstatement and plummeting shares – all before the challenges arising from the pandemic even struck.
Should the share placing and open offer go ahead, it is not yet certain if Kelvin would decide to or even have permission to choose to commit an estimated £28 million he would need to retain his 35 per cent stake in Ted Baker – otherwise he risks having his stake diluted.
“Since the company’s strategic update on 26 February, Ted Baker, along with many businesses, has seen a marked impact on trading due to government actions to limit social interaction and movement,” the retailer told Sky News.
“This, in addition to trading pressures from the last financial year, makes the need for a wider transformation more acute.
As a result, the company is in an advanced stage of preparation for a placing and open offer as part of a broader package of measures that the company has put in place to significantly strengthen the balance sheet.”
Just before the nationwide lockdown was implemented in the UK and as Ted Baker so much of its global estate shut down due the pandemic, it raised £13.5 million from lenders and raised additional cash from the sale and leaseback of its London headquarters building.
The retailer’s lenders had also reportedly been working with FTI Consulting to determine its prospects.
The news comes the same week Ted Baker revealed it would begin a gradual reopening of its stores in England from June 15, as per the government’s guidance.