In trading today, one of the top performers is Ted Baker (LSE:TED). The share price is up 17% at 109p. This comes after confirmation that the business has accepted a takeover bid from Authentic Brands Group for £211m. Two questions arise for me as a potential investor. Is there any opportunity for me with the current Ted Baker share price? If not, then are there other retail brands I could invest in?
A done deal
The accepted bid means that Ted Baker shareholders will receive 110p per share. This is why the share price has jumped pretty much to this level. I don’t see any rational reason for the share price to jump beyond this price. Therefore, there’s no benefit that I can get from buying now. I’ve missed that move.
The business has been looking for a buyer since April, which led to the share price being very volatile as rumours and speculation was rife. Over the past year, the share price is down 37.5%. So although the price has jumped significantly today, the offer price is well below the highs from the past year of 174p.
Ultimately, this deal should ensure the survival of the brand, albeit not as a listed stock on the LSE. The struggles for the retailer since the start of the pandemic aren’t unique. Many others in the sector have underperformed due to the impact of Covid-19.
My thoughts following the Ted Baker share price jump
This does get me thinking. Many peers are trading at very cheap levels. If large businesses are finding the valuations attractive enough to buy, then surely it could be a smart move for me to invest as well.
Then if the market recovers in coming years, the share price gain could be high. Along the way, I might even get a generous payout if I stock I own gets bought out. However, I’m not going to explicitly buy a stock on the hope it gets taken over, as this is pure speculation.
One example that I like at the moment is Superdry (LSE:SDRY). It’s another retail fashion brand that has struggled in recent years. Evidence of this can be seen from the share price, which is down 64% over the past year.
After posting revenue of £872m in 2018, the business has struggled, with 2022 revenue coming in just above £600m. However, the latest results did highlight that store revenue is recovering from the impact of the pandemic. It rose 59.7% year over year.
Based on the Ted Baker move, I think I’m going to pick up a small amount of Superdry shares at the moment. I accept that this is a risky move, as the post-pandemic bump might just be a short-lived phase. But if not, then I’ll be kicking myself in a few years if the share price rebounds from current lows and it becomes a hot growth stock. Further, there is the side benefit if the company gets bought out.
