American maternity retailer Destination Maternity has decided to withdraw its plans to make an offer for British mother and baby apparel retailer Mothercare, after having two bid proposals rejected.
The retailer found that there wasn’t enough support among Mothercare shareholders to pursue a deal at its offer price.
Destination Maternity hopes that the combination of the two companies would create the largest maternity, baby and children’s products retailer.
Earlier this month Mothercare refused to engage with Destination Maternity on its latest proposal, which values Mothercare at about £266m.
This is the latest example of a US company seeking to buy a foreign firm in part to take advantage of lower corporate tax rates abroad.
Destination Maternity chief executive officer and director Ed Krell said, "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."
Destination Maternity said it will continue to focus on delivering its strategy to drive sales and profit growth, both in the US and through the continued expansion of brands internationally.
In recent quarters, Mothercare has been hit hard by cut-throat competition from supermarket groups and online retailers in its main UK market.
By 2015, Mothercare had aimed to make a profit on its British operations, but said in January that 2016 to 2017 was now more realistic.