Steinhoff to gobble up Poundland?

17 June 2016 - 09:06 By Reuters

Steinhoff is considering making a takeover offer for Poundland, the South African company said this week, sending shares in the British discount chain surging. Steinhoff's interest in Poundland is its third attempt to buy a European retailer after losing out to rivals in two separate battles - for Britain's Home Retail and France's Darty earlier this year.Under UK takeover rules, the R340-billion furniture conglomerate has until July 13 to announce a firm intention to bid for Poundland. In an intial response, Poundland told its shareholders to take no action for the moment, noting that there was no certainty that an offer would be made.Poundland sells everything at the single price point of £1 (about R22) in its British stores and also operates in Ireland and Spain.Steinhoff's potential offer comes after US private equity firm Warburg Pincus disclosed on Tuesday that it had sold down its stake in Poundland.Sales growth has slowed, profits are expected to fall in its 2015-2016 financial year and its purchase of rival 99p Stores for £55-million in 2015 has proved problematic, raising questions over the durability of its single price model. - ..

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