Baby and mother retail Mothercare has rejected a second £266m bid from Destination Maternity in the latest example of a US company looking to establish itself in the UK.
Destination Maternity, who delivered the bid on 1 June at 300p a share, said it was “disappointed” that Mothercare had rejected the offer.
Mothercare‘s share price rose 16 per cent in early trading to 269p.
Ed Krell, CEO of Destination Maternity, said: “We have long been familiar with Mothercare and hold the company‘s UK heritage and successful track record of international expansion in the very highest regard. We believe the combination would create a highly attractive opportunity to accelerate the growth and development of both businesses and generate substantial value for our respective shareholders.”
Mothercare, operated by Alshaya in the Middle East, has been struggling since it posted a profit warning in January and
Niall Shah, analyst at Edison Investment Research commented: “A combination with Destination Motherhood may offer a good opportunity for shareholders to reap the benefits from being part of a bigger family brand – growing the trusted Mothercare brand internationally and not be dragged back continually by its underperforming, overshopped UK network.”
