15th Jun 2016 15:59
LONDON (Alliance News) - South African furniture retailer Steinhoff International Holdings NV on Wednesday said it is considering a possible offer for discount store chain Poundland Group PLC, which would be Steinhoff's third run at a London-listed company in 2016 so far.
Steinhoff said any possible offer for the retailer would be made in cash and confirmed it has already acquired 61.2 million shares in the company, equal to a 22.78% stake in Poundland.
Poundland responded, noting Steinhoff's announcement and "strongly" advising shareholders to take no action. "The company will issue a further statement if and when appropriate," Poundland said. "There can be no certainty that a firm offer will be made, nor as to the terms on which any firm offer might be made."
Steinhoff earlier had been involved in bidding unsuccessfully for Home Retail Group PLC, the owner of Argos which was sold to supermarket chain J Sainsbury PLC, and for electricals retailer Darty PLC, which is being acquired by France's Groupe Fnac.
Steinhoff first made an offer for Home Retail in February to rival two offers already made by Sainsbury's. Steinhoff's initial offer of 147.2 pence was 8.5% higher than Sainsbury's second offer and Home Retail gave the pair until March 18 to put forward firm and final offers.
On deadline day, Sainsbury's made a firm offer based on the same terms of its second offer, which was for 55.00 pence per share in cash, plus 0.321 Sainsbury's shares for every Home Retail share, clearing the way for Steinhoff to win Home Retail over with its initial and higher offer.
However, in a surprise twist, Steinhoff pulled out of the race in favour of a making an offer for Darty instead, allowing Sainsbury's to strike a deal with Home Retail.
Competition for Darty proved more intense, with Steinhoff entering a bidding war against Groupe Fnac. Fnac had been the first to table a bid of 105.4p per share for Darty back in November, which Darty had recommended shareholders to accept at the time. However, Steinhoff's much higher offer in March of 125.0p prompted Darty to withdraw its recommendation of Fnac's offer in favour of Steinhoff's.
Later in April, Steinhoff made a second offer, which was closely followed by a second offer from Fnac and which escalated into a day of rival bids as each company desperately tried to outbid the other. This culminated in Steinhoff tabling a final bid of 160.0p, which was above Fnac's last bid made that day.
A few days later, however, Fnac came back with a final bid of 170.0p, putting it ahead in the race. Steinhoff gave up on the bidding war and announced that it was leaving its final offer at 160.0p.
Earlier this month, Darty returned its recommendation to the offer made by Fnac, leaving Steinhoff as the unsuccessful bidder once again.
Now with its eyes set on Poundland, perhaps it will be third-time lucky for Steinhoff. Poundland bought its smaller and slightly keener-priced rival 99p Stores last year.
Shares in Poundland closed up 2.2% to 200.0p on Wednesday following the announcement, giving it a market capitalisation of GBP557.4 million.
By Karolina Kaminska; [email protected] @KarolinaAllNews. Updated by Joshua Warner; [email protected]; @JoshAlliance
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