South African conglomerate Steinhoff International has confirmed that it is considering a bid for value retailer Poundland, after acquiring a number of ordinary shares from the group.
Steinhoff, which owns UK brands Harveys and Benson for Beds, revealed that it acquired 61,212,467 ordinary shares of 1 pence each in Poundland, which represent 22.78% of Poundland’s issued share capital.
Steinhoff also confirmed with a statement that it is considering a bid for the whole of Poundland and that any ‘possible offer’ would be made in cash.
The statement concluded: “There can be no certainty that any offer will be made and a further announcement will be made as appropriate.”
Poundland also commented within a statement, saying: “Shareholders are strongly advised to take no action. The Company will issue a further statement if and when appropriate.
“There can be no certainty that a firm offer will be made, nor as to the terms on which any firm offer might be made. This announcement is being made by Poundland without the prior agreement or approval of Steinhoff.”
In the wake of Steinhoff’s share acquisition, Poundland reported an 84% fall in pre-tax profits to £5.9m in the year to 27 March 2016, with like-for-like sales decline by 3.9%. Poundland said it was a ‘challenging’ but ‘transformative’ year as the acquisition of 99p Stores competed its conversion in Poundland fascia.
The news of Steinhoff’s interest in Poundland comes after numerous failed attempts to expand its group, losing out to Sainsbury’s in the pursuit of Argos owner Home Retail Group, while also missing out on the acquisition of French firm Darty to Fnac (see related).
Steinhoff also lost out in acquiring French bedding group Cauval to investment group Perceva (see related), and is currently linked with a bid for Australian home and electrical retailer The Good Guys (See related).