Steinhoff International has raised its agreed bid for Dealz owner Poundland after Elliott Capital built a stake that threatened to derail the deal.
The South African suitor boosted the offer by 5 pence a share to 227 pence a share, it said in a statement on Thursday.
That values Poundland at £610 million (€708m) , an increase of about £13 million (€15m) on the original bid.
Poundland owns Dealz, which has 53 shops in Ireland and recently announced plans to open a further 20. It says it has more than 300,000 Irish customers.
The new offer comes after New York-based Elliott accumulated a 17.5 per cent stake in Poundland last month through derivative contracts. That posed a potential difficulty for Steinhoff as its original bid required 75 per cent of Poundland’s shareholders to approve the transaction.
This is the second British takeover this year where Elliott has intervened after it was among the firms that asked SABMiller’s board to reconsider the terms of Anheuser-Busch InBev’s takeover.
The incremental cost of raising the bid “is immaterial in the context of Steinhoff, but offers activist shareholders a return on their investment”, Graham Renwick, an analyst at Exane BNP Paribas, said in a note.
Under Steinhoff’s revised offer the bid could proceed in a form that requires support from a simple majority of 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 new chief executive officer Kevin O’Byrne.
The South African company this week extended a European acquisition spree to the US, agreeing to buy Mattress Firm for about $2.4 billion (€2.15bn). – Bloomberg