Value retailer Poundland has agreed to a £597 million takeover deal by South African retail company Steinhoff International, after an initial takeover bid failed last month.
Poundland accepted the 222p-a-share bid this time around, compared to the undisclosed cash offer from Steinhoff last month which was rejected.
The deal also comes after Steinhoff – which owns UK furniture firm Harveys and Bensons For Beds – recently failed to succeed in their takeover bid of Argos parent company Home Retail Group in March, which went to Sainsbury’s instead.
Steinhoff has already built up a 23.6 per cent stake in Poundland and its takeover follows a slump in the value retailer’s shares over the past year due to a challenging trading market.
Annual results for the year to March 27 indicated Poundland’s underlying pre-tax profits had fallen 13.5 per cent to £37.8 million, while bottom-line pre-tax profits plummeted 83.7 per cent to £5.9 million.
Poundland chairman Darren Shapland said the deal provided investors an “opportunity to realise their shareholding at a certain and attractive price”; and that the share price value targeted under its turnaround plan had been achieved earlier than expected given the economic uncertainties in the UK at the moment.
Steinhoff chief executive Markus Jooste said: “Steinhoff is developing a fast-growing, price-led retail business across the UK and the rest of Europe. Poundland would be a complementary fit to this growth story.”
Poundland has around 18,000 staff across more than 900 stores in the UK.
Steinhoff said it had no plans to change the group’s head office or employment conditions for staff, and that managment would continue to play a “key role” after the takeover.