Home / Knowledge / News / Apparel/Garments / Mothercare rejects Destination Maternity's merger proposal
Mothercare rejects Destination Maternity's merger proposal
03
Jul '14
The Board of Mothercare (the "Board") notes the announcement by Destination Maternity Corporation ("Destination Maternity") that it is considering a possible offer for Mothercare. 
 
On 27 May 2014 the Board received a preliminary and highly conditional approach from Destination Maternity regarding a possible offer for Mothercare at an indicative value of 250 - 275 pence per Mothercare share in either a combination of Destination Maternity shares and cash or all cash (the "Proposal").  
 
The Board reviewed the Proposal in detail and concluded that it significantly undervalued Mothercare and its attractive prospects. In addition, the Board had a number of material concerns regarding the deliverability of value to Mothercare's shareholders and the significant execution risk associated with the Proposal.  Accordingly, the Proposal was rejected on 29 May 2014.  
 
On 1 June 2014 the Board received a further preliminary and highly conditional proposal approach from Destination Maternity regarding a possible offer for Mothercare at an indicative value of 300 pence per Mothercare share in a mix of 75 per cent. cash and 25 per cent. shares in a new UK incorporated holding company which would be listed on the NYSE or NASDAQ and would also own Destination Maternity's existing business (the "Revised Proposal").  
 
The Revised Proposal would be implemented by means of a scheme of arrangement, and would require a minimum number of shares in new holding company to be issued to Mothercare shareholders. The Board of Mothercare reviewed the Revised Proposal in detail and continued to believe that it significantly undervalued Mothercare and its attractive prospects.  In addition, the Revised Proposal did not address the Board's material concerns regarding the deliverability of value to Mothercare shareholders and the significant execution risk.  Accordingly, the Revised Proposal was rejected on 3 June 2014.
 
In rejecting the Revised Proposal, the Board highlighted to Destination Maternity the insufficient value attributed to Mothercare and its significant prospects and key concerns regarding the deliverability of value to its shareholders, including the highly conditional nature of the Revised Proposal, the lack of strategic rationale for a combination, the uncertainty regarding the proposed financing arrangements, and the significant transaction execution risks given the proposed transaction structure and tax inversion.
 
As set out in the Mothercare's 2014 preliminary results on 22 May 2014, Mothercare is going through a period of transformation, particularly in its UK business.  The Board remains fully confident in the ongoing execution of Mothercare's strategy as an independent company and that its successful delivery will create significant value for shareholders.
 
Alan Parker, Chairman of Mothercare, said, "The Board has given these proposals full and thorough consideration. We do not believe they reflect the inherent value of Mothercare to our shareholders or its prospects for recovery and growth.  In addition, we have significant concerns about the deliverability of these proposals. Mothercare has a very strong and valuable international business and significant potential for sustained improvement in the UK."

Mothercare plc

Must ReadView All

Courtesy: World Bank/ Harshad Marathe

Apparel/Garments | On 23rd Jul 2016

Rising wages in China to create 1.5 million jobs in S Asia

As wages in China continue to rise, global apparel production and...

Courtesy: 3ders.org

Apparel/Garments | On 23rd Jul 2016

Disney research creates 3D compiler for machine knitting

Introducing 3D technology to machine knitting, Disney Researchers...

Textiles | On 23rd Jul 2016

Telangana to frame new policy for textile industry

The Telangana state government will frame a new policy aimed at...

Interviews View All

Rajiv Sirohi
Shara

‘Portugal is taking away a major share of the mill made sector.’

Evelyne Cholet
UCMTF

‘France had a reputation of being big in new ideas, but poor in marketing...

Milind Khandwe
Hindoostan Innovation Centre

‘Modern technical textile is an indispensable tool for science and...

Eamonn Tighe
Nature Works LLC

Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of...

Giorgio Mantovani
Corman S.p.A

Giorgio Mantovani, MD of Corman, with a presence in both Milano and New...

Mohammad Hassan
Biax Fiberfilm

About one in every 20 patients picks up an infection while hospitalised....

Yash P. Kotak
Bombay Hemp Company

One of the directors of Bombay Hemp Company, Yash P. Kotak, speaks to...

Bani Batra

Bani Batra’s couture wedding collection is inspired by traditional Indian...

Pranav Mishra
Huemn

Designers Pranav Mishra and Shyma Shetty’s Huemn is known for its...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH
june 2016

F2F Magazine

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


Advanced Search