Poundland board recommends Steinhoff offer as £597m takeover nears

Poundland’s board has recommended the cash bid, which would see stakeholders receive 222p per share – a 13.3% premium to the closing price yesterday.

Under the terms of the offer, Steinhoff will pay shareholders 220p per share, with a final dividend of 2p per Poundland share, which was revealed as part of the retailer’s full year results, to be paid in September.

Agreement on the deal has been reached just weeks after Poundland rejected a full takeover bid from the South African retail conglomerate.

However Steinhoff, whose UK interests include Bensons for Beds, said at the time it was considering its position following Poundland’s full-year results and “the impact of the EU referendum on global markets.”

But at the end of June, Steinhoff upped its stake in Poundland to 23.5% and has now agreed terms on a full takeover offer.

It comes after Steinhoff, which counts billionaire Christo Weise among its shareholders, lost out to Sainsbury’s in its bid to acquire Argos-owner Home Retail Group, before being outbid by Fnac in the tussle for control of French electricals retailer Darty.

Poundland chairman Darren Shapland said: “The Poundland board believes that SEAG’s [Stenhoff’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.

“The single-price sector has undergone significant modernisation and professionalisation in recent years and is now a mainstream feature of UK retail.

“Through the hard work and dedication of our many thousands of talented colleagues, Poundland has played a pivotal role in that transformation.

“Steinhoff is a well-capitalised, international business with a clear and proven commitment to value retailing. 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.”

Steinhoff chief executive Markus Jooste hinted that the existing Poundland senior management team would remain in place should the proposed acquisition go through.

He he pointed out the “strength and the value” of its directors and said they would “play a key role in the ongoing growth and devlopment” of the business as part of the South African group’s retail stable.

Jooste added: “The board of Steinhoff and its management team are enthusiastic about the opportunities that this transaction brings: we believe that there is significant merit in bringing Poundland into Steinhoff’s global network.

“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.”