Destination Maternity Corp., an apparel company that recently moved its headquarters from Philadelphia to Moorestown, has rejected a French suitor, according to a Securities and Exchange Commission filing Monday.
Shares of Destination Maternity, which makes maternity wear, shot up 17 percent at the start of trading Monday on the Nasdaq Stock Exchange, but soon settled down to about the same level as their Friday close of $9.
Orchestra Premaman S.A., which makes clothing for children and babies, said in the filing that it paid $16.6 million for a 13.3 percent stake in Destination, and reiterated its desire to engage in merger talks with Destination.
In October, Orchestra offered $25 million in cash plus shares in the French company. Orchestra said the offer valued Destination at a 45 percent premium to the share price at the time.
Destination's share price averaged $11.90 in October, which means the offer could have been worth about $17 per share. The firm's market value is now $122 million.
Arnaud Ajdler, Destination's chairman, said Monday that the company's board considered the offer and engaged in preliminary discussions, but decided "the stock-merger proposal would not be in the best interests of our stockholders considering the risks inherent in a primarily stock-based merger transaction dependent on uncertain revenue synergies."
Destination's shares have had a rough year, ranging from $16.64 in March to a low of $4.99 last month. In the 12 months ended Oct. 31, the company had a net loss of $14.1 million on $546.1 million in revenue.
Orchestra, based near Montpellier, had $459 million in revenue and $55 million in operating profit in the year ended Feb. 28.