 Shares in Mothercare started the week at a rise on the back of reports that several private equity firms are eyeing up a takeover of the ailing retailer. The group's share price up 12p at 172.60p, a 7.47 per cent rise, at 8.58am.
“Shares hit a new one and a half month high on the back of the press speculation this morning as a result. Share prices had been down 74 per cent on the year before today’s trade however, indicating just how much confidence has been lost in the struggling retailer. With shares only jumping 6 per cent today, traders are somewhat hesitant to buy into this story, “Josh Raymond, chief market strategist at City Index, said.
Raymond added that any bid was likely to be around £150 million. “Mothercare's overseas operations are seen as displaying big potential, with the firm's woes largely being seen as routed in the UK and this is more than likely what has attracted the sharks, such as Cinven, to consider a bid,” he said.
European buyout firm Cinven is one of a number of private equity firms considering a takeover, according to reports. AS reported by Where to Invest , Montagu Private Equity and CVC have also been touted as potential suitors.
CINVEN, the private equity giant behind Pizza Express, is eyeing a potential takeover of Mothercare, the ailing baby products retailer. The firm is understood to be in early stages of forming a potential offer and has yet to approach Mothercare’s board, which is being led by chairman Alan Parker after his appointment in August.
Last month Parker announced a “structural and operational” review of the chain’s troubled UK arm, as it revealed a £81m loss for the half-year, sending its already depleted share price tumbling. Sources close to Cinven said to City AM the firm has not yet appointed advisers or lenders and that there could be no certainty of the company making an offer.
Cinven is reported to want to focus on Mothercare’s better performing overseas operations, which comprise of around 960 outlets across Europe, the Middle East and Africa.
Mothercare, which also owns the Early Learning Centre, detailed plans in May to close 110 of its 353 UK stores. The mother and baby group has 353 UK stores and 975 overseas outlets.
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