Ted Baker says Sycamore will participate in formal sale process

There can be no certainty that an offer will be made, nor as to the terms on which any offer will be made, the company said, adding that further announcements will be made "when appropriate".

Ted Baker announced earlier this month that it was kicking off a formal sale process after receiving an improved takeover offer from US private equity firm Sycamore and following other unsolicited third party interest.

In March, the company said it had rejected two offers from Sycamore on the basis that they "significantly undervalued" the business.

At 0900 BST, the shares were up 5.2% at 155.50p.

Victoria Scholar, head of investment at Interactive Investor, said: "Shares rallied more than 14% when the unsolicited bids were announced, and the stock is up sharply again today amid the rising prospect of a deal.

"Ted Baker shareholders have been suffering with a drop of more than 60% in the share price between the peak last April and the trough in February. However takeover speculation has prompted a turnaround with the stock gapping sharply higher in March when the Sycamore approach was first reported. M&A speculation should keep the stock well supported while any signs that the two sides cannot agree likely pushing the stock down towards its March lows."