South Africa’s Steinhoff (SNHG.DE) will strengthen its presence in the British retail sector after agreeing a 597 million pound takeover of discount chain Poundland (PLND.L), it said on Wednesday.
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Poundland accepted the 222p-a-share bid after rejecting a cash offer from Steinhoff last month for an undisclosed sum.
The offer comprises an offer price of 220 pence for each Poundland share as well as a final dividend of 2 pence per share. After losing out to Sainsbury’s in the battle to buy Home Retail Group, it also abandoned attempts to buy French retailer Darty.
The offer price of 220p represents a premium of approximately 39 per cent to the closing price of Poundland’s shares on 13 June 2016, the day before Steinhoff made its first approach.
It follows a hefty slump in Poundland’s shares over the past year after tough trading and a hard takeover of rival 99p Stores.
Darren Shapland, the chairman of Poundland, said the takeover would allow the retailer to achieve its turnaround ambitions sooner than expected “against a background of increasing economic uncertainty in the United Kingdom and a more challenging trading environment”.
He added: “They share our vision for the growth and expansion of Poundland and, as such, we believe they are a suitable and appropriate partner for our colleagues, our suppliers and stakeholders”.
“Steinhoff is a well-capitalised, worldwide business with a clear and proven commitment to value retailing”.
Poundland has around 18,000 staff across more than 900 stores and is headquartered in Willenhall, near Wolverhampton. “Poundland would be a complementary fit to this growth story”, said Steinhoff Chief Executive Markus Jooste. The company’s board is recommending investors accept it. Shares in Poundland have fallen some 40% since the company floated two years ago.
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Steinhoff said it had no plans to change the group’s head office or employment conditions for staff.
