TheChek News Flow

Destination Maternity is believed to be preparing a fresh offer for the listed UK-based children’s wear retailer Mothercare, according to a Sunday Express report. The newspaper did not cite a source for the claim.

It is believed that Destination Maternity chief executive Ed Krell has set up meetings with Mothercare investors this week, the item said.

Destination Maternity has appointed several advisers based in the UK to handle its bid, the article continued. The report noted a deadline of 30 July for the Pittsburgh, Philadelphia-based retailer to formally state its intentions.

Mothercare’s board has rejected two approaches from Destination Maternity, the latest of which valued Mothercare at GBP 266m (EUR 335m).

Mothercare and Destination Maternity have both refused to comment, the Sunday Express article said.

Separately, a Sunday Telegraph report said Mothercare shareholders Allianz and Fidelity have voiced support for the board’s rejection of Destination Maternity’s takeover approaches. The newspaper quoted Paras Anand of Fidelity’s European equities arm, who said Destination Maternity’s approach could be considered “opportunistic,” given that the target company is currently without a chief executive. Anand added that Fidelity would prefer for Mothercare to retain its independence.

The article noted that Krell urged Mothercare shareholders to press for discussions, and that he has visited London to present the case for the proposed takeover.

Simon Gergel, of Allianz’s UK equities unit, described Destination Maternity’s offer as “inadequate,” adding that it substantially undervalues the company, the article said. Gergel Allianz is not in favour of a bid.

Allianz and Fidelity’s stakes in Mothercare account for close to 21% of its shares, the item noted.

Mothercare’s market capitalisation stood at GBP 226m at the close of trading in London on Friday, 4 July.

Source Sunday Express, Sunday Telegraph