Orchestra-Prèmaman improves its cash offer for Destination Maternity

After months of receiving the interest of different suitors, it seems that Destination Maternity is closer than ever to close a deal. The most likely pretender is French maternity and baby apparel retailer Orchestra-Prèmaman, which has just improved its acquisition offer.

French company Orchestra-Premaman wrote in a letter that Destination Maternity's board has "consistently stalled and repeatedly resisted our efforts to commence a constructive dialogue regarding our proposal."

It is noteworthy that Orchestra-Prémaman currently owns 13.9 percent of Destination Maternity capital, and it’s interested in acquiring the reminder to complete the 100 percent of the company.

Orchestra-Prèmaman’s new bid ups cash offer to 29 percent, keeps same total price tag

Now, Orchestra-Premaman SA boosted the cash component of its unsolicited offer to buy Destination Maternity Corp. after the maternity clothing maker turned down its previous proposal.

The new offer still values the US retail group at approximately 125 million dollars, although in a letter sent at the beginning of the week by the French suitor to its coveted partner-to-be, the new offer includes an increased cash weighting in the shares-plus-cash offer presented earlier. The new deal is about 29 percent cash, compared with about 20 percent cash in the previous offer.

In fact, Orchestra-Premaman is now offering 2.6664 dollars in cash plus 0.0596 of an Orchestra-Prèmaman share for each Destination Maternity share, well ahead its previous bid of 1.8035 dollars in cash and 0.0665 of an Orchestra-Prèmaman share.

Destination Maternity didn't immediately comment on the revised offer, though it has previously said holding talks regarding a potential acquisition wasn't in the best interests of its shareholders.

Market concerned about a potential de-listing of Destination Maternity in the US

The French company has been interested in acquiring the American maternity and baby clothing retailer since the end of last year. Although its first approach was declined by the later, Orchestra-Prèmaman management is positive about its improved offer.

Meanwhile, and as reported by the ‘Wall Street Journal’, Destination Maternity had raised concerns that accepting the offer would leave US shareholders with stock that was only listed in Europe, but Orchestra-Prèmaman said should the takeover be successful it would seek a listing in the US, either on the New York Stock Exchange or the Nasdaq.

Additionally, in the letter, Orchestra-Premaman responded to a number of concerns Destination Maternity had previously raised about the offer.

For instance, the French suitor reassured Destination Maternity it would change its primarily listing to either the Nasdaq or the New York Stock Exchange and that the new shares issued as part of the deal would enlarge the number of shares outstanding. Pierre Mestre, Orchestra- Premaman's chairman, said his family's control of the company represents the vast majority of his assets and that this helps ensure it is managed with "proper care, diligence and competence."

The letter also said there would be cost synergies and that the combined company would benefit from selling maternity clothes throughout Orchestra-Premaman's stores.

On the wake of the news, shares in Destination Maternity (NASDAQ:DEST) rose 29 cents to 6.87 dollars apiece. In comparison, Orchestra-Prèmaman's share price was little changed at 99.50 euros at the close on the Euronext bourse.