The Insider: City deals uncovered

Mothercare doing the right(s) thing

True to their word, seven Mothercare chiefs who didn't own shares in the baby clothes and accessories retailer, among them new chief executive Mark Newton-Jones, have put their hands in their pockets ahead of a £100 million rights issue. And another three have beefed up their stakes, taking the buying spree to over half a million pounds.

Mothercare flagged the cash call last week and was keen to emphasise backing from the board. "The directors are fully supportive of the rights issue and intend to take up their rights in full," it said in a lengthy prospectus.

"Certain directors do not own ordinary shares at the date of this announcement and intend to purchase ordinary shares in the market, following which such directors will be eligible, and intend, to take up their rights in full under the rights issue."

Newton-Jones, permanent boss for less than three months, has opened his account with a £274,000 outlay on shares at 248.6p. Another new boy, ex-Marks &Spencer childrenswear director Karl Doyle, has coughed up £89,000 for his 35,815 shares, and former Argos number cruncher and Mothercare finance director Matt Smith paid over £10,000 for a debut stake.

They'll now be entitled to take part in the fully-underwritten 9 for 10 rights issue at a price of 125p, a big discount to the current share price, which has risen in recent days to 268p. Yes, there are clear risks backing a turnaround strategy at the loss-making firm - it's certainly not child's play - but the plan appears sound and the board is packed with experience, making the fundraising worth backing.

CLS builds value

Real estate firm CLS Holdings is doing rather well. Its share price has tripled in four years and is up 8% in the past six weeks to 1,385p. A tender offer of one share for every 119 held at 1,500p recently returned 12.6p a share to shareholders, and a discount to book value of about 8% looks unfair.

Just weeks after the tender offer completed, executive chairman and founder Sten Mortstedt has bought a quarter of a million pounds of shares for up to 1,385p each. The 74-year-old Swede, who set up CLS in 1987 and listed it in London seven years later, now owns a 51.2% worth a cool £304 million.

A £45.2 million increase in property values meant pre-tax profit surged from £27.9 million to £72.6 million in the half-year to June. And net assets grew by over 10% to £531 million.

"The six months to June have proved to be very successful, generating strong earnings, a record low vacancy rate, continued progress in our developments, and solid rental growth driven by our acquisitions of last year, especially the Neo portfolio," explained Mortstedt.

"The outlook for the group remains attractive as our high level of occupancy and continued low cost of debt underpin our ability to generate cash. With strong operations, a solid balance sheet and a high level of liquid resources, we remain in a good position to benefit from the opportunities and challenges which lay ahead."

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.