The owner of Bensons for Beds agrees terms to buy the single price discount retailer in a deal valuing the chain at almost £600m.
A Poundland store
A South African retailer has agreed terms to enter the UK's single price discount market in a £597m takeover of Poundland.
Steinhoff International said the chain, which has
more than 900 stores across the UK and Ireland, would be a
"complementary fit" for its growth ambitions across Europe.
Its all-cash offer of 220p per share - plus a 2p dividend - represents a premium of more than 13% on the closing price for shares on Tuesday but Poundland shares remain at over half the value they were early last year.
The Poundland board is recommending investors accept the deal. It had dismissed a previous offer on value grounds.
Its shares rose 12% after the takeover announcement.
Steinhoff, which already owns furniture firm Harvey's and the Bensons for Beds chain, had made an offer earlier this year for the company behind Argos but lost out to Sainsbury's.
It was also outbid for London-listed white goods retailer Darty.
Poundland - which benefited from a boost to business amid the financial crisis and resulting recession - has been struggling in more recent times followings its troubled £55m purchase of rival 99p Stores.
It has spent big on converting those shops to its own brand and same-store sales fell 4% in the year to March.
Total sales were boosted by the integration of its one-time rival.
Steinhoff is backed by South African billionaire Christo Wiese whose Brait investment group also owns controlling stakes in Virgin Active, New Look and food chain Iceland.
It gave no indication of major changes ahead - saying it "recognised the value" of the existing management team at Poundland.
Darren Shapland, chairman of Poundland, said: "The Poundland board believes (the) all-cash offer presents Poundland shareholders with an opportunity to realise their shareholding at a certain and attractive price, securing earlier delivery of the Poundland Group's medium term value than could be expected from the ongoing turnaround process against a background of increasing economic uncertainty in the UK and a more challenging trading environment".
He added: "They share our vision for the growth and expansion of Poundland and, as such, we believe they are a suitable and appropriate partner for our colleagues, our suppliers and stakeholders".
Its all-cash offer of 220p per share - plus a 2p dividend - represents a premium of more than 13% on the closing price for shares on Tuesday but Poundland shares remain at over half the value they were early last year.
The Poundland board is recommending investors accept the deal. It had dismissed a previous offer on value grounds.
Its shares rose 12% after the takeover announcement.
Steinhoff, which already owns furniture firm Harvey's and the Bensons for Beds chain, had made an offer earlier this year for the company behind Argos but lost out to Sainsbury's.
It was also outbid for London-listed white goods retailer Darty.
Poundland - which benefited from a boost to business amid the financial crisis and resulting recession - has been struggling in more recent times followings its troubled £55m purchase of rival 99p Stores.
It has spent big on converting those shops to its own brand and same-store sales fell 4% in the year to March.
Total sales were boosted by the integration of its one-time rival.
Steinhoff is backed by South African billionaire Christo Wiese whose Brait investment group also owns controlling stakes in Virgin Active, New Look and food chain Iceland.
It gave no indication of major changes ahead - saying it "recognised the value" of the existing management team at Poundland.
Darren Shapland, chairman of Poundland, said: "The Poundland board believes (the) all-cash offer presents Poundland shareholders with an opportunity to realise their shareholding at a certain and attractive price, securing earlier delivery of the Poundland Group's medium term value than could be expected from the ongoing turnaround process against a background of increasing economic uncertainty in the UK and a more challenging trading environment".
He added: "They share our vision for the growth and expansion of Poundland and, as such, we believe they are a suitable and appropriate partner for our colleagues, our suppliers and stakeholders".
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