skip to main content
  • *
  • *
Find Insight DIY on
* * *

UK DIY News

Steinhoff increases Poundland stake to 23%

Pound land store front

Last week, Steinhoff International confirmed it was the secret buyer of a 15.3% stake in the discount chain, sold by private equity group Warburg Pincus. As at today, Steinhoff has now increased it's share in Poundland to 23%.

Read the original story 'Steinhoff expresses interest in Poundland' here.

However, Steinhoff confirmed that it was acting without the consent of Poundland management, suggesting talks had not gone well. "They are essentially making a hostile bid," said Wayne McCurrie of Momentum Asset Management. "It does not look like (Poundland’s) management is supporting their bid so they are buying … in the open market," he said. 

Earlier this year, Steinhoff walked away from a face-off with UK retailer Sainsbury’s for Argos owner, Home Retail Group.

Steinhoff Group already has a strong presence in Europe where it generates almost 60% of its total revenue, with international brands such as Conforama and UK-based Harveys, Bensons for Beds and Cargo.

A full buyout of Poundland would give Steinhoff 900 new discount stores across Britain, Ireland and Spain after Poundland bought the 99p chain.

The timing of Steinhoff’s potential bid was interesting, Chris Gilmour, analyst at Absa Wealth and Investments said. It was just before the Brexit vote on June 23, which will determine whether the UK will stay in the EU. "This may make the consideration for Poundland a little bit cheaper," Gilmour said.

Steinhoff chairman Wiese understood the discount market well, he said, having previously owned Poundstretcher, a value retail chain. Poundstretcher, however, struggled to keep up with larger rivals Poundland and B&M and Wiese sold it around 2009.

On Wednesday, Wiese told Reuters that he fully supported Steinhoff’s bid and that he believed Poundland would be a "good fit".

Source: Insight DIY Team

23 June 2016

Related News

view more UK DIY News
*

Insight DIY is the only source of market information that I need and they always have the latest news before anyone else.

*
Neil Anderton - Sales Director, British Ceramic Tile
Newsletters

Don't miss out on all the latest, breaking news from the DIY industry