Poundland agrees to £597m foreign takeover by South African firm
Steinhoff International had also tried to buy Argos owner Home Retail Group but was outbid by Sainsbury's
BUDGET chain POUNDLAND yesterday agreed to a £597million foreign takeover - as the weak pound makes UK firms increasingly attractive to bids from abroad.
It had already knocked back a bid last month from STEINHOFF INTERNATIONAL.
The South African firm also lost out to SAINSBURY’S in a battle to buy Argos’ owner HOME RETAIL GROUP earlier this year - and in a separate deal for UK electricals chain DARTY.
But with yesterday’s offer for Poundland of 222p a share - 40 per cent more than its value a month ago - it finally succeeded.
Darren Shapland, chairman of Poundland, said the deal gives investors an “opportunity to realise their shareholding at a certain and attractive price”.
He called Poundland “a well-loved brand”.
The discount chain has, however, struggled since taking over its rival 99p STORES last year.
Underlying pre-tax profits fell 13.5 per cent to £37.8 million in the year to March 27.
Steinhoff chief exec Markus Jooste said it was “enthusiastic about the opportunities that this transaction brings”, adding, there is “significant merit in bringing Poundland into Steinhoff’s global network”.
He added management at Poundland would continue to play a “key role” after the takeover and he looked forward to “welcoming” the chain’s employees.
Poundland has around 18,000 staff across more than 900 stores in the UK, Ireland and Spain, with its HQ in Willenhall, near Wolverhampton.
Retail analysts at LIBERUM said Steinhoff had offered a “knock-out price”.
Former Poundland chief exec Jim McCarthy, who left on July 1 after 10 years in charge, stands to make £22million from the deal.
Russ Mould, investment director at stockbroker AJ BELL, said: “The deal will enable Poundland to achieve its turnaround goals sooner than expected and against a background of increasing economic uncertainty and a more challenging trading environment.”