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| Struggling Poundland agrees to £597m takeover by Steinhoff | Struggling Poundland agrees to £597m takeover by Steinhoff |
| (about 2 hours later) | |
| Poundland has agreed to a £597m takeover by Steinhoff, the South African retail conglomerate that owns Harveys and Bensons for Beds in the UK. | Poundland has agreed to a £597m takeover by Steinhoff, the South African retail conglomerate that owns Harveys and Bensons for Beds in the UK. |
| The struggling discount retailer recommended the deal to shareholders, who will receive 220p a share, plus the 2p a share dividend announced in June for the year ending 27 March. It values the company at £597m, Poundland said. | |
| Steinhoff first emerged as a potential buyer on 15 June and had a deadline of 5pm on Wednesday to announce a firm intention to make a bid or walk away. | |
| The group had been building a stake in the UK chain and owned 23.6% of Poundland on 12 July, the day before the offer was confirmed. | The group had been building a stake in the UK chain and owned 23.6% of Poundland on 12 July, the day before the offer was confirmed. |
| 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 UK and a more challenging trading environment”. | 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 UK and a more challenging trading environment”. |
| “Steinhoff is a well-capitalised, international business with a clear and proven commitment to value retailing,” he said. | |
| “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.” | “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.” |
| The deal is the latest move by the billionaire Christo Wiese to take a share of the UK’s burgeoning discount market. Wiese, who owns a 17% stake in Steinhoff, also has stakes in fashion chain New Look and supermarket Iceland, as well as an investment in Virgin Active gyms via his Brait investment vehicle. | The deal is the latest move by the billionaire Christo Wiese to take a share of the UK’s burgeoning discount market. Wiese, who owns a 17% stake in Steinhoff, also has stakes in fashion chain New Look and supermarket Iceland, as well as an investment in Virgin Active gyms via his Brait investment vehicle. |
| Steinhoff’s pursuit of Poundland is its third attempt this year to buy a European retailer. After losing out to Sainsbury’s in the battle to buy Home Retail Group, it also abandoned attempts to buy French retailer Darty. | Steinhoff’s pursuit of Poundland is its third attempt this year to buy a European retailer. After losing out to Sainsbury’s in the battle to buy Home Retail Group, it also abandoned attempts to buy French retailer Darty. |
| Commenting on the Poundland deal, Steinhoff’s chief executive, Markus Jooste, said: “Steinhoff recognises the strength and value of the Poundland management team and anticipates that they will play a key role in the ongoing growth and development of Poundland as part of the Steinhoff group. | Commenting on the Poundland deal, Steinhoff’s chief executive, Markus Jooste, said: “Steinhoff recognises the strength and value of the Poundland management team and anticipates that they will play a key role in the ongoing growth and development of Poundland as part of the Steinhoff group. |
| “We look forward to welcoming Poundland employees to be part of one of Europe’s leading multi-format discount retailers.” | “We look forward to welcoming Poundland employees to be part of one of Europe’s leading multi-format discount retailers.” |
| The offer from Steinhoff comes at a difficult time for Poundland, which admitted in April that sales had been hit by the £55m purchase of its loss-making rival 99p Stores. | The offer from Steinhoff comes at a difficult time for Poundland, which admitted in April that sales had been hit by the £55m purchase of its loss-making rival 99p Stores. |
| Poundland is also struggling with dwindling numbers of shoppers on Britain’s high streets and competition from supermarkets, which are in the throes of a fierce price war. The company’s longstanding chief executive, Jim McCarthy, stepped down in April to be replaced by the former B&Q chief executive Kevin O’Byrne. | Poundland is also struggling with dwindling numbers of shoppers on Britain’s high streets and competition from supermarkets, which are in the throes of a fierce price war. The company’s longstanding chief executive, Jim McCarthy, stepped down in April to be replaced by the former B&Q chief executive Kevin O’Byrne. |
| With the takeover of 99p Stores complete after a six-month investigation by the competition regulator, Poundland has more than 900 outlets in the UK and Ireland. | With the takeover of 99p Stores complete after a six-month investigation by the competition regulator, Poundland has more than 900 outlets in the UK and Ireland. |
| The Steinhoff offer represents a 40% premium to the closing share price of 158.25p on 13 June, the day before it started building a stake, and a 13% rise on the 196p closing price on 12 July. | The Steinhoff offer represents a 40% premium to the closing share price of 158.25p on 13 June, the day before it started building a stake, and a 13% rise on the 196p closing price on 12 July. |