Steinhoff considers takeover bid for Britain's Poundland


South Africa’s Steinhoff is considering making a takeover offer for Poundland, it said on Wednesday, sending shares in the British discount chain surging.

Steinhoff’s interest in Poundland is its third attempt to buy a European retailer after losing out to rivals in two separate battles for Britain’s Home Retail and France’s Darty earlier this year.

Under UK takeover rules, the $22 billion furniture conglomerate has until July 13 to announce a firm intention to bid for Poundland.

In an intial response, Poundland told its shareholders to take no action for the moment, noting that there was no certainty than an offer would be made.

By 0910 GMT, shares in Poundland were up 4 percent at 203.25 pence, their highest level since early January, valuing the company at more than 500 million pounds ($710 million).

Steinhoff’s potential offer comes after U.S. private equity firm Warburg Pincus disclosed on Tuesday that it had sold down its stake and ahead of an annual earnings report from the company due on Thursday.

Warburg Pincus originally listed the discount retailer in March 2014 at a price of 300 pence per share.

The shares had been trading down 25 percent so far this year before the private equity firm sold its stake.

Poundland sells everything at the single price point of 1 pound in its British stores and also has operations in Ireland and Spain.

Sales growth has slowed, profits are expected to fall in its 2015-16 financial year and its purchase of rival 99p Stores for 55 million pounds in 2015 has proved problematic, raising questions over the durability of its single price model. ($1 = 0.7045 pounds)