Oriel Securities says Mothercare may face bid after CEO quits

24th Feb 2014 13:20

Oriel Securities said troubled baby goods retailer Mothercare could face a takeover bid after Chief Executive Simon Calver unexpectedly quit.Mothercare said on Monday that Calver, who joined the business in April 2012, was leaving with a £294,540 pay-off, but no bonus for 2014.The group, which warned on profits last month, welcomed Calver's progress in improving its online operations but is thought to have been unhappy with the profitability of its UK business.There has already been speculation that it may face a takeover bid by supermarket giant Tesco. It is also thought to have been in talks to sell its Early Learning Centres to a buyer such as Wal-Mart's Asda.Oriel advised investors to reduce their stakes in the company, saying it was likely to take Calver's successor a while to turn around the business.Oriel said: "The surprise departure of CEO Simon Calver will unsettle Mothercare shareholders as the business battles to cope with an increasingly price driven and competitive market."Whilst the absence of a CEO may ignite bid speculation in the short-run, the road to recovery is likely to be long."The shares rose 4.5p or 1.8% to 252p at 13:24 in London.PW