Poundland owner delays flotation as FTSE 100 suffers worst day since 1987

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Coronavirus: Poundland owner postpones stock market flotation
Steinhoff was expected to finalise a takeover deal or an IPO for Poundland later this year. (Image: PA)
// Steinhoff delays stock market flotation of Poundland amid stock market volatility triggered by coronavirus
// The delay also comes after Poundland boss Andy Bond came down with an unrelated illness
// Follows the worst day on record for the FTSE 100 since 1987

Steinhoff has decided to hold off on a flotation for Poundland as the stock market endures its worst day in 33 years.

Steinhoff postponed a potential sale or flotation of its Pepco Group business, which comprises 2000 stores across Europe including Poundland in the UK and Pepco and Dealz in mainland Europe.

The South African retail conglomerate was expected finalise a takeover deal or a stock market flotation later this year, after it confirmed last November that it looking at options for the future of Pepco Group.


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The decision to postpone was also made with the timing of Poundland boss Andy Bond taking two months of leave due to an illness that is not related to coronavirus.

The news comes as the FTSE 100 closed yesterday down by more than one tenth as fears over the coronavirus pandemic sparked the index’s worst bloodbath since 1987.

Investors ran scared from London’s shares as the index closed Thursday down by 639.04 points to 5237.48, wiping more than £160 billion off the value of the index’s 100 companies, the worst value loss in history in nominal terms.

The 10.87 per cent fall is also worse than any day during the 2008 financial crisis and investors wanting to find a bigger drop need to look back to October 20 1987, the day after Black Monday, when the FTSE 100 fell 12.2 per cent.

It was also the second worst day in the FTSE’s history, ahead of the 10.84% fall on Black Monday itself.

According to Bloomberg, Steinhoff had been seeking a valuation for Pepco Group of over €4 billion (£3.5 billion).

Meanwhile earlier this month, Poundland’s former owner Advent International teamed up with private equity firms Hellman & Friedman and Mid Europa Partners for a planned takeover that could value Pepco Group at over €4.5 billion (£3.8 billion).

The interest shown from the Advent-led consortium provided Steinhoff with an alternative to an IPO.

Speculation of Pepco Group going public first emerged in September, just weeks before it was renamed from Pepkor Europe.

When the company officially renamed to Pepco Group that month, bosses kept open the possibility of a sale or an IPO.

It wouldn’t be Poundland’s first time on the stock market – Steinhoff took it private in July 2016 in a £600 million deal.

Steinhoff – which is still reeling from the fallout of a 2017 accounting scandal worth an estimated $7.4 billion (£6.1 billion) – said last August that its only way to survive was to slim down and sell assets.

In November, Bensons for Beds and Harveys had a change of hands after its parent company Blue Group – which was owned by Steinhoff – was sold to Alteri Investors for an undisclosed sum.

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