US firm withdraws Mothercare offer

US chain Destination Maternity has withdrawn a bid for UK maternity and baby-wear firm Mothercare.

In a statement the company said it was clear that "only a very significant increase" in the offer would be acceptable to shareholders.

Mothercare has twice rejected takeover proposals from Destination Maternity, which valued the mother and baby products retailer at £266m.

It said the bids did not reflect the "inherent value" of the firm.

The chief executive of Destination Maternity, Ed Krell said he was "disappointed" that shareholders had not supported the proposal and that the board was unwilling to engage in discussions regarding the proposal.

"We believe that there was a strong strategic rationale for the combination of these highly complementary businesses, which would have enhanced the product range of both companies, spanning the pregnancy to toddler life-cycle, " he said.

Destination Maternity has 1,900 stores and owns the brands A Pea in the Pod and Motherhood Maternity.

Mothercare has been struggling recently and new boss Mark Newton-Jones recently admitted it needs to modernise.

He took over at the beginning of the year after a profit warning led to the resignation of the previous chief executive Simon Calver.

Earlier on Friday, Mothercare also announced that its chief financial officer Matt Smith had resigned, but that he would stay on for another 12 months while the firm looked for a successor.