A “for sale” sign has been hoisted by Ted Baker’s board after the fashion brand received a sweetened takeover proposal from a US private equity firm and rival bid interest.

Ted Baker confirmed last month that it had rejected two takeover approaches from Sycamore Partners, which would have valued the business at £254 million. Since the buyout firm’s last approach at 137½p a share, Ted Baker said it had received a third proposal, as well as “other unsolicited third-party bid interest in relation to the company”.

The company said: “In view of the interest expressed by potential offerors, and having consulted its major shareholders, the board has decided to conduct an orderly process to establish whether there is a bidder prepared to offer a value that the board considers attractive relative to the standalone prospects of Ted Baker as a listed company.”

Shares in Ted Baker rose by 15.19p, or 11.85 per cent, to 143.39p in morning trading, valuing the company at £248 million.

It is not clear at this stage whether it has received one or more other expressions of interest but City sources said that Sycamore’s approach had sent a signal that there could be an opportunity for a leveraged buyout of another undervalued British asset.

A formal sales process means that the board can conduct an auction in private, without the restrictions of the Takeover Panel’s typical 28-day timetable. Sycamore’s present “put up or shut up” bid deadline of 5pm on April 15 will fall away if it participates in the formal process. A source said that Sycamore was a “serious” bidder.

Ted Baker said that its advisers at Evercore and Blackdown Partners “intend to conduct a targeted process, focused on those parties who understand and value the full potential of this unique brand”. Only bidders that proceed to a second phase of the sale process and agree to signing a non-disclosure agreement will be given non-public commercial information about the company’s finances for due diligence.

Despite speculation three years ago that Ray Kelvin, the brand’s founder, could tie up with a private equity firm to buy back the business after its crash in value following his exit, it is not known whether Sycamore or the rival interest includes any involvement from Kelvin. While Kelvin stepped back from the company in 2019, in the wake of a “forced hugging” scandal, he reached an agreement with Ted Baker and since September 2020 has had a representative on the board, Colin La Fontaine Jackson, a solicitor at Clifford Chance.

Ted Baker was founded by Kelvin in 1988 with one shop in Glasgow and has grown to 550 shops and concessions. The company’s valuation has fallen by 90 per cent since his exit and on the back of profit warnings and a big accounting error.

Rachel Osborne, the chief executive since March 2020, has been attempting to turn around the brand by focusing on full-price sales and cutting costs.

The company reasserted that its recent sales in the fourth quarter had grown by 35 per cent compared with the previous year, while it had a “strong balance sheet, with a net cash position and ample liquidity headroom to continue to grow”.