Steinhoff ups offer for Dealz company

Steinhoff ups offer for Dealz company

South African retailer Steinhoff has upped its offer for UK discount chain Poundland after pressure from a US hedge fund to bump up the deal.

Poundland, which operates as Dealz in Ireland, has agreed to a higher 227p-a-share bid, worth £610.4m including a 2p-a-share dividend, following moves by Elliott Management to build up a 17.5% stake in the group.

Steinhoff had originally agreed a 222p-a-share deal worth £597m last month, but within days the US activist had increased its stake, reportedly with plans to bump up the deal - so-called "bumpitrage".

Poundland and Steinhoff remained tight-lipped on Elliott's involvement in the higher offer.

Darren Shapland, chairman of Poundland, said: "The Poundland board is pleased to recommend Steinhoff Europe's increased all-cash offer which presents Poundland shareholders with an opportunity to realise their shareholding at an improved price."

Steinhoff said its revised offer was final.

Markus Jooste, chief executive of Steinhoff, added: "By offering Poundland shareholders an improved cash offer we aim to bring certainty to the transaction recognising the strength and value of the business and its management team."

Elliott has a track record of "bumpitrage" and muscling in on takeovers, having played a part in pushing for a better offer from brewing giant Anheuser-Busch InBev for SABMiller.

It also succeeded in getting a higher offer for Quintain - the UK property group that developed Wembley Stadium - last year from US buyout firm Lone Star.

Steinhoff, which owns UK furniture firm Harveys and Bensons For Beds, has been determined to expand further across Europe, having tried and failed to gatecrash two deals in recent months.

It 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.

It is backed by South African retail billionaire Christo Wiese, whose Brait investment group also owns controlling stakes in Virgin Active, New Look and food chain Iceland.

Poundland has around 18,000 staff across more than 900 stores and is headquartered in Willenhall, near Wolverhampton.

Steinhoff has already said it has no plans to change the group's head office or employment conditions for staff.

The takeover 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 13.5% to £37.8m in the year to March 27, while bottom-line pre-tax profits crashed 83.7% to £5.9m, including converted 99p Stores.

More in this Section

Flat rate deductions are unfairly squashedFlat rate deductions are unfairly squashed

Chile protests continue after government backs down on fare hikeChile protests continue after government backs down on fare hike

Serious Fraud Office closes Libor rigging investigationSerious Fraud Office closes Libor rigging investigation

Johnson insists EU free trade agreement can be struck amid no-deal Brexit fearsJohnson insists EU free trade agreement can be struck amid no-deal Brexit fears


Volunteers from the multinational tech company harvest food fresh from Fota Gardens, writes Peter Dowdall.Made in Munster: The tech giant Apple harvesting food from Fota Gardens

Peter Dowdall takes a look at a plant that thrives in damp soil and is a key part of Ireland’s biodiversityThe wonders of willows: A key part of Ireland’s biodiversity

Pollutants can have an impact on your health, but there are things you can do to reduce the potential damage.High pollution days ‘lead to more cardiac arrests and strokes’: 5 easy ways to protect yourself

Even if you only have room for one pot in the smallest space, plant some tulips in it to make your garden spring to life, says Hannah Stephenson.7 design tips to make your tulips in garden pots stand out in a crowd

More From The Irish Examiner