Destination Maternity has rejected an unsolicited takeover bid by French children's clothing company and stockholder Orchestra-Premaman SA.

In a filing with the Securities and Exchange Commission, the French company said it wanted to engage in discussions with Destination Maternity to determine a merger deal following a rebuff of its initial letter to the company in October. Orchestra-Premaman currently holds a 13.3% stake in the maternity wear firm and had made an offer two months ago of $25m in cash plus shares in the French company, valuing Destination Maternity at a 45% premium to the share price at the time.

In a further letter dated 13 December, the French retailer reiterated its interest in starting talks, based on the terms outlined in its 29 October letter.

In response, however, Destination Maternity said that following consultations with its financial and legal advisors, it was unanimously determined that such a deal was not in the best interests of the company and its stockholders "considering the risks inherent in a primarily stock-based merger transaction dependent on uncertain revenue synergies".

Orchestra-Premaman's stock is traded on the Euronext Paris stock exchange and is illiquid, with the company being effectively controlled by one stockholder who owns over 90% of the shares outstanding. It also has no operations in the US, Destination Maternity said. 

"As a management team and as a board we are always striving to enhance stockholder value," said CEO Anthony Romano. "We continue to focus on our key strategic initiatives, which position us to capitalise on our strong market share to drive sales productivity and profitability in the short and long term. These include leveraging improvements to our inventory process and real estate strategy, optimising our e-commerce sales and connecting more closely with our millennial consumer."

Destination Maternity, which saw third-quarter losses widen to US$1.3m, as total sales dropped to $119.5m from $125.1m and comparable sales slipped 3.6%, had a takeover offer of its own turned down last year for UK mother, baby and children's goods retailer Mothercare. 

Mothercare upbeat as Destination Maternity withdraws bids