Bidders circle Mothercare

A number of UK entrepreneurs are in talks with private equity houses to launch a bid for the underperforming baby products chain.

Mothercare, the UK-listed maternity and baby products retailer, is the subject of increasing bid speculation as several of the UK’s leading retail entrepreneurs prepare bids for the troubled chain.

Boxfresh chairman David Carter-Johnson is the latest individual to be linked with a bid for the company, joining a growing number of interested parties considering an offer.

Terry Green, former Debenhams and BHS chief executive, has held talks with HSBC over a possible joint offer for the company. Other interested parties include Tom Hunter, former owner of Sports Division and Bob Marsh, a former Mothercare director, who has the backing of the Schottenstein family, whose retail empire includes American Eagle Outfitters and Value City.

The Times newspaper reports today that Carter-Johnson has secured venture capital backing for a possible offer for Mothercare, although the identity of the backer is not disclosed. A number of other private equity firms are believed to be considering a bid. One of those, European private equity house Permira, today declined to comment on the speculation.

Mothercare has suffered more than most during the recent downturn in stock market valuations. In the past twelve months, the firm’s market capitalisation has fallen from £245m to just under £90m. In May, the firm reported annual pre-tax profits of £4.2m, down on the previous years £10.2m and some way below forecasts in excess of £16m. The poor 2001 results led to the departure of chief executive Chris Martin.

Reports suggest that an offer for Mothercare is not expected in the short-term as the company’s current 125p share price, despite recent falls, is still too high to tempt potential bidders.