Dealz owner Poundland sold for €717m
Discount chain Poundland, which operates in Ireland as Dealz, is to be snapped up by South African retailer Steinhoff International after agreeing a £597m (€717m) takeover deal.
Poundland accepted the 222p-a-share bid after rejecting a cash offer from Steinhoff last month for an undisclosed sum.
The deal comes after Steinhoff - which owns UK furniture firm Harveys and Bensons For Beds - recently lost out in a battle with Sainsbury's to buy Argos owner Home Retail Group in March and was outbid for London-listed white goods retailer Darty.
The sale price, which also includes a 2p-a-share final dividend on top of the 220p-a-share bid, marks around a 40pc premium to the value of Poundland's shares in mid-June.
It follows a hefty slump in Poundland's shares over the past year after tough trading and a difficult takeover of rival 99p Stores.
Annual results recently laid bare Poundland's sales woes as underlying pre-tax profits fell 13.5pc to £37.8m in the year to March 27, while bottom-line pre-tax profits crashed 83.7pc to £5.9m, including converted 99p Stores.
Steinhoff had already built up a 23.6pc stake in Poundland in recent weeks as it stepped up its pursuit of the set-price retailer.
Darren Shapland, chairman of Poundland, said the deal gives investors an "opportunity to realise their shareholding at a certain and attractive price".
He said it achieved the share price value targeted under its turnaround plan earlier than could be expected "against a background of increasing economic uncertainty in the UK and a more challenging trading environment".
Steinhoff chief executive Markus Jooste said: "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."
He added that management at Poundland would continue to play a "key role" after the takeover and said he looked forward to "welcoming" the chain's employees.