Poundland chain targeted by South African retailer

Poundland has caught the eye of South African retailer Steinhoff. Picture: Ian Georgeson

Discount chain Poundland is being stalked by South African retailer Steinhoff after the group revealed yesterday it was weighing a takeover bid.

The news, which saw Poundland shares jump 7 per cent before closing up just over 2 per cent, or 4.25p, at 200p, comes after Steinhoff withdrew in March from a takeover tussle with ultimate winner Sainsbury’s for the Argos-owning Home Retail Group.

The suitor said little on its interest in Poundland, except that it would make a further announcement in due course.

It has until 5pm on 13 July to make a firm offer or walk away under City takeover rules. Poundland said shareholders were “strongly advised to take no action”.

Sales drop to weigh down Poundland profit figures

Speculation over a potential bid had risen after a stake of about 15 per cent of the group was sold to an unknown buyer at a 24p premium to the stock price on Tuesday.

Steinhoff 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.

It comes ahead of Poundland’s annual results today, when outgoing chief executive Jim McCarthy is expected to post a double-digit fall in profits.

The chain has had a testing year, including a difficult integration of rival 99p Stores after its acquisition, and like‑for‑like sales down 4.9 per cent in the second trading half. Kevin O’Byrne, former UK and Ireland boss of the B&Q do-it-yourself chain, succeeds McCarthy on 1 July.