Destination Maternity retreats from Mothercare's bidding

US-based Destination Maternity has given up on its British peer Mothercare. The former will withdraw its plans to make an offer for British mother and baby apparel retailer Mothercare, after having two bid proposals rejected. Destination Maternity seems to have gotten Mothercare's

message: we are not interested. The US-based maternity and baby apparel retain chain has been trying to bait Mothercare into a joint venture to set foot on the UK.

However, earlier this month, Mothercare refused to engage with Destination Maternity on its latest proposal, which values Mothercare at about 266 million pounds.

Destination Maternity CEO and director Ed Krell summed up the discontent reigning at the company he heads saying that "We are disappointed that the shareholders of Mothercare have not supported our proposal and that the board of Mothercare was unwilling to allow us to conduct customary due diligence and engage in discussions."

Destination Maternity gives up on Mothercare but will keep pursuing growth

“Our proposals to Mothercare about a possible combination show our willingness to pursue potential opportunities to help drive shareholder value for Destination Maternity and are consistent with our stated strategic objective to enhance our position as a global leader in maternity apparel, including through international expansion,” continued Krell.

The retailer hoped that the combination of the two companies would create the largest maternity, baby and children's products retailer. This wasn't a shared opinion, as Destination Maternity soon found that there wasn't enough support among Mothercare shareholders to pursue a deal at its offer price.

On 2 July 2014, Destination Maternity made an announcement confirming its interest in a possible combination with Mothercare and confirming its submission of two non-binding written proposals for a possible combination, both of which had been rejected by the Board of Directors of Mothercare.

“Following the announcement on 2 July 2014, Destination Maternity's financial adviser canvassed the views of shareholders who hold a substantial proportion of Mothercare shares. While Destination Maternity believes that its proposal was compelling, it is clear that the shareholders of Mothercare believe that only a very significant increase in the value of such proposal would be acceptable. In light of this and considering Destination Maternity has not been permitted by the Mothercare Board to conduct customary due diligence, Destination Maternity is unwilling to increase the value of its proposal and has therefore decided to withdraw its proposal,” Destination Maternity summed up the full disagreement in a statement issued over the weekend.

CEO at Destination Maternity concluded that despite the refusal from Mothercare, “At the same time, our announcement today that we do not intend to make an offer for Mothercare demonstrates that we will continue to maintain strict financial discipline in evaluating potential initiatives and opportunities.”

Destination Maternity said it will continue to focus on delivering its strategy to drive sales and profit growth, both in the US and through the continued expansion of brands internationally.

Angela González Rodríguez