Wednesday, November 22, 2017

Mothercare rejects second bid from Destination Maternity

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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.”