Steinhoff plans bid for Poundland

Shares in Poundland surged seven per cent higher today on the bid interest from Steinhoff.

It marks the latest takeover move by Steinhoff, after it lost out in a battle with Sainsbury's to buy Argos owner Home Retail Group in March.

Steinhoff - which owns UK furniture firm Harveys - has given little detail on its interest in Poundland, saying only that it will make a further announcement "in due course".

It has until 5pm on July 13 to make a firm bid or walk away under City takeover rules.

Poundland has urged its shareholders not to take any action. It said: "Poundland shareholders are strongly advised to take no action. The company will issue a further statement if and when appropriate."

Speculation over a potential bid for Poundland had been mounting ahead of the Steinhoff announcement after a stake of around 15 per cent of the group was sold at a 24 per cent premium to the stock price yesterday.

While the buyer was not confirmed, the move duly sent shares surging 24 per cent higher.

It comes before Poundland's results tomorrow when outgoing boss Jim McCarthy will unveil his final set of full-year figures.

The chain has had a testing year following sales falls and a difficult takeover of rival 99p Stores.

The group is expected to report an 11 per cent drop in underlying pre-tax profits to £38.7 million for the year to March 27 after seeing sales declines pick up pace in the final six months.

Like-for-like sales decreased by 3.9 per cent over the full year, but the fall was steeper in the second half, at 4.9 per cent.

A potential bid from Steinhoff gives new Poundland boss Kevin O'Byrne an eventful start to his tenure at the top.

The former B&Q UK and Ireland boss takes over from Mr McCarthy on July 1, having joined as chief executive designate in April.

But Mr McCarthy will remain with the group until his retirement at the firm's annual shareholder meeting in September.