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Poundland takeover by South Africa's Steinhoff gets green light from investors

Published 07/09/2016

Discount retailer Poundland looks set to go private after shareholders approved a 610 million pound takeover by Steinhoff of South Africa
Discount retailer Poundland looks set to go private after shareholders approved a 610 million pound takeover by Steinhoff of South Africa

Shareholders have backed South African retailer Steinhoff's £610 million takeover of Poundland, paving the way for the discount retailer to go private.

The deal received the overwhelming backing of Poundland investors, securing 98% of their support.

It was thought that US hedge fund Elliot Management, which owns nearly 25% of Poundland and is its biggest shareholder, could block the deal.

Last month, Steinhoff upped its offer for the discount chain after pressure from Elliot, and the firm will now pay 227p a share, worth £610.4 million, and a 2p-a-share dividend for Poundland.

Steinhoff, which also owns UK furniture firms Harveys and Bensons For Beds, has been determined to expand further across Europe, having tried and failed to gatecrash two deals in recent months.

It recently lost out in a battle with Sainsbury's to buy Argos owner Home Retail Group in March and was outbid for London-listed white goods retailer Darty.

In August, Steinhoff warned that the collapse in the value of sterling following the EU referendum could have an adverse impact on its British businesses.

The firm said the currency's plunge may result in an "unfavourable effect when translating out businesses' earnings reported into euro", adding that it could have "an adverse effect on future margin".

Sterling has plummeted more than 10% against the dollar since the Brexit vote on June 23.

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