Response to announcement

Mothercare plc

2 July 2014

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY (IN WHOLE OR IN PART) IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

THIS ANNOUNCEMENT IS NOT AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE") AND THERE CAN BE NO CERTAINTY THAT AN OFFER WILL BE MADE, NOR AS TO THE TERMS ON WHICH ANY OFFER WILL BE MADE

FOR IMMEDIATE RELEASE

Mothercare plc

Possible Offer for Mothercare plc ("Mothercare")

The Board of Mothercare (the "Board") notes the announcement by Destination Maternity Corporation ("Destination Maternity") that it is considering a possible offer for Mothercare.

On 27 May 2014 the Board received a preliminary and highly conditional approach from Destination Maternity regarding a possible offer for Mothercare at an indicative value of 250 - 275 pence per Mothercare share in either a combination of Destination Maternity shares and cash or all cash (the "Proposal").  The Board reviewed the Proposal in detail and concluded that it significantly undervalued Mothercare and its attractive prospects. In addition, the Board had a number of material concerns regarding the deliverability of value to Mothercare's shareholders and the significant execution risk associated with the Proposal.  Accordingly, the Proposal was rejected on 29 May 2014. 

On 1 June 2014 the Board received a further preliminary and highly conditional proposal approach from Destination Maternity regarding a possible offer for Mothercare at an indicative value of 300 pence per Mothercare share in a mix of 75 per cent. cash and 25 per cent. shares in a new UK incorporated holding company which would be listed on the NYSE or NASDAQ and would also own Destination Maternity's existing business (the "Revised Proposal").  The Revised Proposal would be implemented by means of a scheme of arrangement, and would require a minimum number of shares in new holding company to be issued to Mothercare shareholders. The Board of Mothercare reviewed the Revised Proposal in detail and continued to believe that it significantly undervalued Mothercare and its attractive prospects.  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.  Accordingly, the Revised Proposal was rejected on 3 June 2014.

In rejecting the Revised Proposal, the Board highlighted to Destination Maternity the insufficient value attributed to Mothercare and its significant prospects and key concerns regarding the deliverability of value to its shareholders, including the highly conditional nature of the Revised Proposal, the lack of strategic rationale for a combination, the uncertainty regarding the proposed financing arrangements, and the significant transaction execution risks given the proposed transaction structure and tax inversion.

As set out in the Mothercare's 2014 preliminary results on 22 May 2014, Mothercare is going through a period of transformation, particularly in its UK business.  The Board remains fully confident in the ongoing execution of Mothercare's strategy as an independent company and that its successful delivery will create significant value for shareholders.

Alan Parker, Chairman of Mothercare, 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."

In accordance with Rule 2.6(a) of the Takeover Code, Destination Maternity will have until 5.00pm on 30 July 2014 (or such later time and/or date as may be agreed by the Takeover Panel) to announce either a firm intention to make an offer for Mothercare or that it does not intend to make an offer.

This statement is being made by Mothercare without the prior agreement or approval of Destination Maternity. There can be no certainty that any offer will be made nor as to the terms of any offer. Shareholders are strongly advised to take no action.

Enquiries

Mothercare plc

Alan Parker, Chairman                                       [phone]

Mark Newton-Jones, Interim Chief Executive       [phone]

Tim Ashby, Group General Counsel                    [phone]

Goldman Sachs International (Financial adviser to Mothercare)

Anthony Gutman                                               [phone]

Nick Harper

Michael Casey

JP Morgan Cazenove (Corporate broker to Mothercare)

Luke Bordewich                                                 [phone]

Caroline Thomlinson

Numis Securities (Corporate broker to Mothercare)

Christopher Wilkinson                                        [phone]
Rupert Krefting

Tulchan Communications LLP

Katharine Wynne                                               [phone]

Jonathan Sibun

A copy of this announcement will be made available on Mothercare's website at www.mothercare.com.

The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

Goldman Sachs International, which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, is acting exclusively for Mothercare and no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than Mothercare for providing the protections afforded to clients of Goldman Sachs International, or for providing advice in connection with the matters referred to in this announcement.

J.P. Morgan Securities plc is authorised in the United Kingdom by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. J.P. Morgan Securities plc conducts its UK investment banking business as J.P. Morgan Cazenove. J.P. Morgan Securities plc is acting as corporate broker exclusively for Mothercare and no one else in connection with the matters set out in this announcement and will not regard any other person as their client in relation to the matters in this announcement and will not be responsible to anyone other than Mothercare for providing the protections afforded to clients of J.P. Morgan Securities plc, nor for providing advice in relation to any matter referred to herein.

Numis Securities Limited, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for Mothercare as its broker and no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than Mothercare for providing the protections afforded to clients of Numis Securities Limited, or for providing advice in connection with the matters referred to in this announcement.

Rule 2.10

As at the date of this announcement, Mothercare plc has 88,815,598 ordinary shares of 50 pence each in issue and admitted to trading on the main market of the London Stock Exchange.  The International Securities Identification Number for the ordinary shares is ISIN: GB0009067447.

Dealing Disclosure Requirements

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on [phone] if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Forward Looking Statements

This announcement contains statements about   Mothercare that are or may be forward looking statements. All statements other than statements of historical facts included in this announcement may be forward looking statements. Without limitation, any statements preceded or followed by or that include the words "targets", "plans", "believes", "expects", "aims", "intends", "will", "should", "could", "would", "may", "anticipates", "estimates", "synergy", "cost-saving", "projects", "goal", "hopes", "continues", "strategy", "budget", "forecast" or "might", or words or terms of similar substance or the negative thereof, are forward looking statements. Such forward looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward looking statements. Due to such uncertainties and risks, no assurances can be given that such expectations will prove to have been correct and readers are cautioned not to place undue reliance on such forward looking statements, which speak only as of the date hereof.   Mothercare disclaims any obligation to update any forward looking or other statements contained herein, except as required by applicable law.  There are several factors which could cause actual results to differ materially from those expressed or implied in forward looking statements.  Among the factors that could cause actual results to differ materially from those described in the forward looking statements are changes in the global, political, economic, business, competitive, market and regulatory forces, future exchange and interest rates, changes in tax rates and future business combinations or dispositions.

No profit forecasts

No statement in this announcement is intended as a profit forecast and no statement in this announcement should be interpreted to mean that earnings per Mothercare share for the current or future financial years would necessarily match or exceed the historical published earnings per Mothercare share.

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This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Mothercare Plc via Globenewswire

HUG#1811215