Mothercare Shares Bounce With Joy On New Bid
Shares in Mothercare have risen sharply, after the retailer said it had rejected a takeover offer for the second time.
In early London trades shares in the company rose by more than 15% before dropping to around 11% up.
The latest proposal from North American company Destination Maternity, valued the UK firm at about £266m.
Mothercare has over 1,400 stores worldwide and in January issued a profit warning after poor UK sales.
The company has 220 UK stores branded as Mothercare and Early Learning Centres.
Destination Maternity, which is the world's largest designer and retailer of maternity wear with more 1,900 retail sites, has so far failed to persuade the board of Mothercare to engage in talks over its interest.
It disclosed that it has tabled two approaches to the struggling UK chain, with its latest cash and shares proposal on June 1 valuing Mothercare at 300p a share.
Mothercare recently recorded UK losses of £21.5m following a drop in annual sales of 7.5%.
It also is looking for a new chief executive after Simon Calver quit following poor Christmas trading.
Destination Maternity planned on introducing brands such as 'A Pea In The Pod' and 'Motherhood Maternity' to Mothercare's UK stores and international franchise stores.
The proposals would combine the two firms within a new UK holding company that would be listed in the United States.
Destination Maternity chief executive Ed Krell 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."