Sainsbury's considered Mothercare acquisition but didn't make an offer

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Sainsbury's acquired Argos two years ago

Sainsbury's considered adding struggling retailer Mothercare to its shopping basket, but decided against making an offer, it has emerged.

The supermarket, which bought out Argos for £1.4bn back in 2016, is understood to have looked into a potential acquisition of the company in recent months but did not make an offer, the Press Association reported.

Shares in Mothercare closed up yesterday on the news, and climbed a further 3.5 per cent in early trading this morning.

The news comes at the end of another tough week for Mothercare after it pushed out chief executive Mark Newton-Jones with just minutes' notice. It has now appointed former Kmart boss David Wood as his replacement.

Last month City A.M. revealed that Mothercare had appointed KPMG advisers to handle a refinancing.

The group's share price has plummeted in recent months after two profit warnings and a softer consumer outlook.

As well as adding Argos to its basket, Sainsbury's had considered a takeover of convenience chain Nisa. But it later decided not to put forward a formal offer and Co-op bought the chain for nearly £140m.