South African firm Steinhoff agrees €713m deal for Poundland, the UK-based parent company of Dealz
South African company Steinhoff has agreed a £597m (€713m) deal to buy UK-based discount retailer Poundland, which trades here as Dealz.
The deal is the biggest takeover of a British-listed company since the outcome of the Brexit referendum.
Steinhoff is a multi-billion dollar company that's offering ranges from clothes to furniture from 2,300 stores across Europe.
The offer made was valued at 220p per share plus 2p in dividends. Steinhoff is looking beyond the short-term effects of Brexit as it looks to strengthen its foothold in Europe.
Steinhoff chief executive Markus Jooste said Poundland is a complementary fit to the company's European growth.
"Steinhoff recognises the strength and value of the Poundland management team and anticipates that they will play a key role in the ongoing growth and development of Poundland as part of the Steinhoff group.
"We look forward to welcoming Poundland employees to be part of one of Europe's leading multi-format discount retailers," Mr Jooste said.
Last year Poundland reported a 13.5pc fall in underlying full-year profits but continued to roll out stores across Ireland and the UK.
Despite the financial troubles Steinhoff continued to pursue Poundland, as it looked to increase its European footprint.
Steinhoff has already failed with bids for Home Retail, which owns Argos, and French-based Darty.
Poundland chairman Darren Shapland said the offer gives investors the chance to realise their shareholding in the company.
"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," Mr Shapland said.
Steinhoff's bid comes as sterling has been struggling against other currencies, making UK-based assets cheaper for foreign firms.
Poundland has struggled against increased pressure from German retailers Aldi and Lidl.
The acquisition of Poundland follows its purchase of 251-outlet 99p Stores chain in September, which has since been converted into the Poundland format.
The 99p Stores deal set the Dealz parent back by £55m late last year. By 2pm yesterday shares in Poundland had soared by 12.6pc up to £2.20.
Under British takeover rules, Steinhoff had until July 13 to announce a firm intention to bid for all of Poundland.
Despite its dip in profits last year Poundland saw its underlying sales increase by 9.3pc to £1.2bn.