Steinhoff International raised its agreed bid for UK discount chain Poundland after an activist investor built a stake that threatened to derail the deal.
The South African suitor increased the offer by 5p a share to 227p a share, valuing Poundland at £610 million, it said in a statement on Thursday.
The new bid comes after Elliott Capital accumulated a 17.5 per cent stake in Poundland last month through derivative contracts. Steinhoff’s original bid required 75 per cent of the target company’s shareholders to approve the transaction.
Under the revised offer, the bid could proceed with more than 50 per cent support from shareholders.
Steinhoff, whose 2,300 stores sell a range of items from furniture to discount apparel, will need to revive growth at Poundland, which just embarked on a turnaround plan under Kevin O’Byrne, the newly appointed chief executive officer .
The 227p offer includes Poundland’s 2p full-year dividend. The target company was advised by JPMorgan Cazenove and Rothschild, while Investec acted for Steinhoff.
Markus Jooste, Steinhoff chief executive said both the boards of Steinhoff and Poundland considered the new offer “to be at a highly attractive premium to the Poundland undisturbed share price”.
“We believe there is significant merit to both Poundland and Steinhoff in bringing Poundland into our global operations, and the Steinhoff directors and management are enthusiastic about the related opportunities that will arise.”
© Bloomberg
