Discount store Poundland (LON:PLND) has agreed to a financial takeover from Steinhoff International in a £597m deal.
Having already taken over Bensons for Beds and Harvey’s in the UK, the agreement comes as the South African company takes advantage of the weaker pound in buying the company which will increase its reach in Europe through Poundland’s 900 stores.
Markus Jooste, CEO of Steinhoff, 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”
The deal will see Steinhoff pay 222p per share.
The price represents a premium of 40.3% of the closing price of 158.25p on 13 June 2016.
Poundland believes that this offer will increase its shareholders value as trading environments since the EU Referendum have become difficult, adding to prior economic uncertainty.
The discount retailer has struggled after the £55m purchase of 99p stores with full year profits plunging and its share price falling from 418p to below 200p.
In Reaction to the agreement, shares in Poundland increased back above the 200 mark by 12% to 219.75p
Darren Shapland, Chairman of Poundland, said:
“The Poundland Board believes that SEAG’s all-cash offer presents Poundland shareholders with an opportunity to realise their shareholding at a certain and attractive price, securing earlier delivery of the Poundland Group’s medium term value than could be expected from the ongoing turnaround process against a background of increasing economic uncertainty in the UK and a more challenging trading environment
13/07/2016
