UK children's wear retailer Mothercare is in discussions to acquire a 25% stake in Headline Group Limited, which operates the Mothercare and Early Learning Centre franchises in Australia and New Zealand.

The investment will be made by way of convertible loan notes with a value of AUS$12.2m (US$10.6m).

"The capital will provide Headline with increased resources to accelerate the nationwide expansion of the Mothercare and Early Learning Centre brands in Australia and New Zealand," Mothercare told the London Stock Exchange.

The stake purchase is subject to due diligence and agreement of final documentation, Mothercare added.