(Adds details, background, shares)
July 25 U.S. baby product retailer Destination
Maternity Corp gave up its pursuit of Britain's
Mothercare Plc after having two bid proposals rejected.
Earlier this month Mothercare confirmed it had spurned
Destination Maternity's increased proposal that valued the UK
firm at 266 million pounds, or $453 million.
That proposal on June 1 was the latest example of a U.S.
company seeking to buy a foreign firm in part to take advantage
of lower corporate tax rates abroad.
"We are disappointed that the shareholders of Mothercare
have not supported our proposal and that the board of Mothercare
was unwilling to allow us to conduct customary due diligence and
engage in discussions," Chief Executive Ed Krell said in a
statement on Friday.
Destination Maternity's shares were unchanged at $22.95 in
afternoon trading, valuing the company at about $315 million.
The company said it had hoped that the combination of the
two companies would create the largest maternity, baby and
children's products retailer.
Under Britain's takeover rules Destination Maternity had
until July 30 to announce a firm intention to make an offer for
Mothercare, or walk away.
Mothercare, hit hard by cut-price competition from
supermarket groups and online retailers in its main UK market,
said on Friday its Chief Financial Officer Matt Smith had
resigned, months after its Chief Executive Simon Calver quit.
Mothercare had aimed to make a profit on its British
operations by 2015, but said in January that 2016 to 2017 was
now more realistic.
Destination Maternity, which operates 1,901 stores across
U.S. and Canada and grappling with falling sales, said earlier
this month its full-year earnings would be below its forecast.
The company, which is shutting a number of underperforming
stores, reported a 5.5 percent fall in third-quarter sales.
(Reporting by Karen Rebelo and Shailaja Sharma in Bangalore;
Editing by Savio D'Souza)