Discount retailer Poundland has urged investors to “take no action” after Steinhoff International, the South African retail group, said it was considering a takeover.
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Speculation over a potential bid for Poundland had mounted after a stake of around 15% was sold at a 24% premium to the stock price on Tuesday.
Steinhoff’s interest in Poundland is its third attempt to buy a European retailer after losing out to rivals in two separate battles for Britain’s Home Retail (Other OTC: HMRLF – news) and France’s Darty (Euronext: DRTY.NX – news) earlier this year.
In September 2015, Poundland took over rival 99p Stores but has since seen a slowdown in sales.
The announcement was made without Poundland’s consent, Steinhoff said in a statement Wednesday, adding that it will provide an update in due course.
It also confirmed that its offer for Poundland would be made in cash.
The retail group owns homewares retailer Harvey’s in the United Kingdom and utilises its products in developing countries as well as selling furniture across Europe.
South African retail mogul Christo Wiese, who is Steinhoff’s chairman and biggest shareholder, told Reuters he was interested in Poundland because it would be a “good fit” for Steinhoff but did not elaborate further.
Steinhoff has until 5pm on July 13 to make a firm bid or walk away under City takeover rules. The company said will issue a further statement if and when appropriate.
Poundland warned over profits in January after Christmas trading was hit by poor numbers of shoppers on the high street, and trading has remained under pressure since then.
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With the takeover of 99p Stores now complete, following a six-month investigation by the competition regulator, Poundland has more than 900 stores in the United Kingdom and Ireland.
