02.07.2014 08:29:46

Destination Maternity Confirms Interest In Combination With Mothercare

(RTTNews) - Destination Maternity Corp. (DEST) confirmed Wednesday that it has submitted two non-binding written proposals to Mothercare plc. (MTC.L) about a possible combination of the two companies, which have both been rejected by the Board of Directors of Mothercare.

Destination Maternity noted that it believes its latest increased proposal, which was delivered on 1 June 2014, provides a strong basis for discussions between the parties but Mothercare has refused to engage with Destination Maternity on its proposals. Destination Maternity continues to evaluate its options with regard to a possible combination.

Destination Maternity's latest proposal is for a combination of the two companies under a new UK holding company, which would be listed in the U.S., whereby Mothercare shareholders would receive 300 pence for each Mothercare share, which today would comprise 230 pence in cash and shares in the new holding company valued at 70 pence, and which would value all the issued share capital of Mothercare at approximately 266 million pounds or $453 million.

In addition, Destination Maternity proposed a mix and match election under which Mothercare shareholders could elect to receive more shares or more cash in an offer, subject to equal and opposite elections by other shareholders.

Destination Maternity's proposal represents a premium of approximately 29% to the closing price of Mothercare shares of 232.5 pence on 1 July 2014; an increase of 9% - 20% to the original proposal made by Destination Maternity on 27 May 2014 under which Mothercare shareholders would have received between 250 - 275 pence for each Mothercare share.

Destination Maternity said it reserves the right to make an offer for Mothercare at less than 300 pence: with the agreement or recommendation of the Mothercare Board; if a third party announces a firm intention to make an offer for Mothercare which is valued at a lower price than 300 pence; or following the announcement by Mothercare of a whitewash transaction pursuant to the Code.

As per Rule, Destination Maternity must, by no later than 5.00 pm on 30 July 2014, announce a firm intention to make an offer for Mothercare or announce that it does not intend to make an offer.

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