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| Mothercare rejects £266m takeover approach from US firm | |
| (35 minutes later) | |
| Mothercare has rejected two takeover proposals from US firm Destination Maternity, which value the mother and baby products retailer at £266m. | |
| Destination Maternity said its latest offer was worth 300p per Mothercare share, a 29% premium on the firm's closing price of 232.5p on 1 July. | Destination Maternity said its latest offer was worth 300p per Mothercare share, a 29% premium on the firm's closing price of 232.5p on 1 July. |
| It made its first approach to Mothercare in May and said it had not ruled out a revised bid. | It made its first approach to Mothercare in May and said it had not ruled out a revised bid. |
| Mothercare issued a profit warning in January blaming weak Christmas sales. | Mothercare issued a profit warning in January blaming weak Christmas sales. |
| The following month chief executive Simon Calver announced his resignation from the retailer. | The following month chief executive Simon Calver announced his resignation from the retailer. |
| Former Shop Direct and Next Directory executive Mark Newton-Jones took over as interim chief executive on 17 March. | Former Shop Direct and Next Directory executive Mark Newton-Jones took over as interim chief executive on 17 March. |
| Mothercare has struggled in recent years in the face of intense competition from both internet rivals and supermarkets. | Mothercare has struggled in recent years in the face of intense competition from both internet rivals and supermarkets. |
| In the UK, which accounts for about 70% of its sales, it has closed about 80 stores, revamped others and expanded online. | In the UK, which accounts for about 70% of its sales, it has closed about 80 stores, revamped others and expanded online. |
| Mothercare currently has around 1,440 stores worldwide. Last year, it said it expected to turnaround its loss-making UK operations by 2015. | Mothercare currently has around 1,440 stores worldwide. Last year, it said it expected to turnaround its loss-making UK operations by 2015. |
| But in January this was pushed back to as late as 2017. | But in January this was pushed back to as late as 2017. |
| 'Attractive opportunity' | 'Attractive opportunity' |
| Under the terms of the deal Mothercare shareholders would be paid 230p per share in cash and receive shares in a new holding company valued at 70p per share. | Under the terms of the deal Mothercare shareholders would be paid 230p per share in cash and receive shares in a new holding company valued at 70p per share. |
| Shares in Mothercare jumped nearly 14% to 265p following news of the takeover approach. | Shares in Mothercare jumped nearly 14% to 265p following news of the takeover approach. |
| Ed Krell, chief executive 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. | Ed Krell, chief executive 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. | "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. |
| "Given this, we are seeking to engage with the board of Mothercare on a constructive basis with the goal of completing a recommended transaction." | "Given this, we are seeking to engage with the board of Mothercare on a constructive basis with the goal of completing a recommended transaction." |
| The deal would see Destination Maternity brands including its 'A Pea In The Pod' and 'Motherhood Maternity', labels sold in Mothercare's UK stores and its international franchise partners' stores. | The deal would see Destination Maternity brands including its 'A Pea In The Pod' and 'Motherhood Maternity', labels sold in Mothercare's UK stores and its international franchise partners' stores. |
| Destination Maternity would also convert some Mothercare stores in order to create its own retail presence in the UK. | Destination Maternity would also convert some Mothercare stores in order to create its own retail presence in the UK. |
| The US firm claims to be the world's largest designer and retailer of maternity clothes. It operates 1,906 retail stores in North America and has a presence in the Middle East, South Korea and Mexico, but as yet no presence in Europe. | The US firm claims to be the world's largest designer and retailer of maternity clothes. It operates 1,906 retail stores in North America and has a presence in the Middle East, South Korea and Mexico, but as yet no presence in Europe. |