International retail group Steinhoff has expressed its intentions in a takeover bid of British value retailer Poundland.
As a formal offer has not yet been made, the suffering retailer has asked investors not to take action.
Poundland shares increased by 2% after they soared by 24% on Monday as a result of takeover speculation.
Under official UK takeover rules, the South African business has until 13 July to announce a definite intention to bid for Poundland.
Earlier this year, Steinhoff took on big four grocer Sainsbury’s in a bidding war for Home Retail Group, yet eventually pulled out leaving Sainsbury’s to sign the £1.4bn deal. The company also failed to take over French retailer Darty.
The retail group owns homewares retailer Harvey’s in the UK and utilises its products in developing countries as well as selling furniture across Europe.
Steinhoff International is currently worth $22bn (£1.6bn) while Poundland has been valued at just more that £500m.
Poundland operates a total estate of around 600 stores across the UK, Ireland and Spain and is working towards opening 16 new sites a year for the next two years in the UK and Ireland. Poundland also added its main competitor 99p Stores to its portfolio in September 2015.