Mothercare shares plummet as CFO resigns and Destination Maternity backs out of takeover
Shares in Mothercare have dropped by as much as 11.6 per cent in early trading on Monday after potential buyer Destination Maternity backed out of a proposed takeover.
Destination Maternity, a US company, offered £266m for the struggling British chain, however it was rejected by Mothercare bosses for being too low.
"We are disappointed that the shareholders of Mothercare have not supported our proposal," Destination Maternity chief executive Ed Krell said in a statement late last week as he confirmed that it would not be raising the bid.
As a result, Mothercare’s share price plummeted in early trading yesterday.
Just days before Destination Maternity pulled out of the deal, Mothercare’s chief financial officer Matt Smith announced his resignation but said he would remain at the company for the next 12 months. He is set to take on the same role at high street retailer, Debenhams.
Mothercare was firm in its belief that the business could be turned around following a turbulent start to the year. In February, chief executive Simon Calver announced his immediate departure after the retailer issued an annual profit warning to investors.
“The board remains confident in the ongoing execution of Mothercare's strategy as an independent company," read a statement from the company.