US retailer ends Mothercare pursuit

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Mothercare

The takeover pursuit of Mothercare by American retailer Destination Maternity has ended after the chain withdrew its interest.

Mothercare had previously rejected two approaches from the US firm, including one worth £266 million at the start of June.

Destination Maternity said it was clear that Mothercare's shareholders wanted to see a "very significant" increase in the value of its proposal.

It pointed out that without due diligence and the opportunity to hold talks with the Mothercare board it had decided to withdraw its interest.

Chief executive Ed Krell said: "We believe that there was a strong strategic rationale for the combination of these highly complementary businesses, which would have enhanced the product range of both companies, spanning the pregnancy to toddler life-cycle."

Destination Maternity, which has more than 1,900 retail sites, had wanted to introduce brands such as A Pea In The Pod and Motherhood Maternity to Mothercare stores.

Its proposals involved combining the two companies under a new UK holding company, which would have been listed in the United States.

Mothercare, which has 220 UK shops under the Mothercare and Early Learning Centre brands, has been closing stores and developing its internet offer as part of a long-running effort to turn around its fortunes.

It recently recorded UK losses of £21.5 million but is looking to revive its fortunes under the leadership of new chief executive Mark Newton-Jones.