Poundland soars as South African bidders Steinhoff hope to be third time lucky

Poundland could fall into South African hands after former Argos suitor Steinhoff revealed it is considering a takeover of the value retailer.

Speculation about a possible bid mounted yesterday after it emerged a mystery buyer had snapped up much of private-equity firm Warburg Pincus’s 15.3% stake in the pound shop chain.

The shares sold for 195p, a 23% premium to Monday’s closing price.

Poundland shares, which floated in 2014, rose almost 24% yesterday, and were today up 6% at 208p.

Steinhoff, which owns Bensons for Beds and Harveys in the UK, said today it was “considering a possible offer for the entire issued share capital of Poundland”.

It made the announcement without the consent of Poundland, it added. Poundland acknowledged the notice, but advised investors not to take action, saying there was no certainty an offer would be made.

Steinhoff has until 5pm on July 13 to announce a firm intention to make an offer or walk away under UK Takeover rules.

A formal offer would mark Steinhoff’s third attempt at a merger in four months. In March it walked away from Argos after going toe-to-toe with Sainsbury’s. It then pursued London-listed electricals firm Darty, but also lost that battle, after Darty backed a bid from France’s Fnac.

The move will overshadow Poundland’s annual results tomorrow, which are expected to reveal an 11% plunge in underlying pre-tax profits following a testing year marred by disruption from its takeover of 99p Stores.