Apparently, Tesco has been assessing the possibility of the acquisition for more than six months. As a potential tonic to sluggish domestic sales, Tesco has announced an ambitious expansion plan, prepared to invest as much as $1.6 billion.
The rumors of Tesco’s intentions remain unconfirmed by official sources. Many analysts remain skeptical that Mothercare’s share prices have fallen enough as of yet for the takeover to make sense for Tesco. Others have hypothesized that Tesco is not considering an outright acquisition, but rather wants to broker a more collaborative relationship that allows it to take over some of Mothercare’s underperforming locations.
Mothercare’s sales have suffered recently, and its share price plummeted 30 percent after it announced that its profits will fall below expectations in its next fiscal report. In an attempt to cut costs, the retailer has shuttered eighty stores in the U.K.