South African retail group Steinhoff is to buy Poundland for more than £610m after shareholders in the discount retailer approved the deal, despite an intervention by hedge fund Elliott Advisors.
Almost 98% of votes were cast in favour of the deal at a meeting of Poundland shareholders, with 79% of shareholders voting.
The vote means Steinhoff is poised to finally complete a takeover of a British-listed retailer, after its attempts to buy Home Retail Group, the owner of Argos, and Darty, the French electrical retailer, were rebuffed.
Steinhoff is backed by Christo Wiese, the South African retail billionaire, who has publicly stated his ambition to expand his interests in Britain. Steinhoff already owns furniture chains Harveys and Bensons for Beds in the UK.
Steinhoff’s takeover of Poundland was thrown into doubt when aggressive US hedge fund Elliott, which was an investor in electrical retailer Comet before it collapsed, built up a stake of almost 25% in the discount chain.
This led to Steinhoff increasing its offer from 222p per share to 227p per share, including a dividend.
It is understood that Elliott voted in favour of the deal. The hedge fund is estimated to have made a profit of at least £3m.
The offer price represents a premium of 43% to the Poundland share price before news of Steinhoff’s interest emerged.
However, it is well below the 300p per share that Poundland floated at two years ago. The company has struggled since buying rival chain 99p Stores and finding it in a worse state than expected. It is also under growing pressure from other discount retailers such as B&M, and from a price war among the “big four” supermarket chains, Tesco, Sainsbury’s, Asda and Morrisons.
Steinhoff’s takeover of Poundland is now scheduled to be legally completed on 16 September. It has already been approved by the European commission.
