Mothercare said that it rejected US retailer Destination Maternity’s offer for the company as it “significantly undervalued” the business.

Mothercare’s board initially received an offer from Destination Maternity of 250p to 275p per share in late May, which it rejected. The offer was then upped to 300p per share on June 1.

Mothercare said it still “significantly undervalued” the retailer and “its attractive prospects”. It also said: “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.”

Mothercare chairman Alan Parker 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 said it had also highlighted  the “lack of strategic rationale” for a combination, the uncertainty regarding the proposed financing arrangements, and the significant execution risks given the proposed transaction structure and tax inversion.

The retailer said that it remains fully confident in the execution of Mothercare’s strategy as an independent company.

Destination Maternity has until July 30 to give a firm intention to make a further offer for Mothercare, in accordance with the Takeover Code.

Mothercare rejects two bids from US firm Destination Maternity