Steinhoff buys Poundland for £597m

Poundland accepted the 222p-a-share bid after rejecting an undisclosed offer from Steinhoff last month

Poundland accepted the 222p-a-share bid after rejecting an undisclosed offer from Steinhoff last month

Steinhoff already owns Harveys, Pep, and Bensons for Beds in the United Kingdom as well as France-based furniture chain Conforama. Sales have been hurt by a surge in online shopping and a price war among the UK's largest supermarket chains, while last year's acquisition of the rival 99p Stores chain has also caused disruption. "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", he added.

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 United Kingdom at the moment.

Poundland recently reported a near 84 per cent fall in annual statutory profits to £5.9 million as it counted the cost of its lengthy takeover battle of 99p Stores and tougher trading in a crowded discounter market.

The price represents a premium of 39 percent to Poundland's share price on June 13 - the last day prior to the first purchase of Poundland shares by Steinhoff.

Steinhoff had made an informal approach for Poundland last month, but the offer was rejected.

"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".

Steinhoff said it had no plans to change the group's head office or employment conditions for staff.

Meanwhile, British retail industry veteran Kevin O'Byrne was named chief executive officer of Poundland in March and took over the reins on July 1.

The former B&Q United Kingdom and Ireland head took over from predecessor Jim McCarthy on July 1, having joined as chief executive-designate in April.

They added: "The recommended cash offer is a good result for Poundland shareholders and comes at a time when there was more downside risk than upside in our view".

Steinhoff is seeking to challenge the likes of Sweden's Ikea after moving its primary share listing to Frankfurt from Johannesburg in December.

Steinhoff has been determined to expand further across Europe, having tried and failed to gatecrash two deals in recent months.

Mr Shapland told the Press Association that Steinhoff's bid was an "attractive offer", in particular since the European Union referendum result has sent retail stocks plunging.

Shares in Poundland leapt 12% higher after the takeover announcement.

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