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Brait CEO John Gnodde
Brait CEO John Gnodde

Did Steinhoff or Brait buy Poundland? - UK


Business Day Live - Jun 15th 2016, 11:17

London — Bid hopes sent UK retailer Poundland surging yesterday after a mystery buyer paid a big premium to become the discount retailer’s biggest shareholder. 

Traders speculated that South African peers Steinhoff and Brait could be interested. However, it was unclear why any bidder would make its move ahead of a quarterly trading update scheduled for tomorrow.

Poundland shares surged 23.7% to 195.8 pence.

Traders were tipped off to the stake building after Investec handled a single off-market trade of 40.9-million shares at 195p apiece, against an undisturbed price of 155p.

Warburg Pincus, Poundland’s 15.3% shareholder, which floated the retailer two years ago at 300p a share, was rumoured to have been the seller. Nevertheless, Poundland’s board was said to be in the dark as to the identity of the buyer.

Referendum uncertainty, sterling’s weakness, and squeezed bond yields dragged the market lower for a fourth straight day. The FTSE 100 slid 2%, or 121.44 points, to 5,923.53.

Housebuilders dropped after Crest Nicholson said central London sales rates were down 60%. Stephen Stone, chief executive, said he had grown a "little bit concerned" about outer London house prices and highlighted a boom in demand along the Crossrail route.

Crest fell 7.1% to 520.5p, Barratt Developments was down 3.7% to 516.5p, and Taylor Wimpey slipped 3.7% to 173.1p.

Berkeley, which has the most central London exposure, was off 4.2% to £29.90 ahead of results expected today.

"The listed housebuilders we follow all stopped buying land in central London 18-24 months ago and have since focused on [Tube] zones 3-6," said Jefferies. "Given the house price inflation over the last 24 months ... we believe that there is plenty of margin buffer in those London land banks."

Go-Ahead tumbled 18% to £19.95 after warning that margins at its Thameslink rail franchise would be half the expected rate, at just 1.5%. Blaming "very challenging performance and industrial relations environments", the transport group said earnings lost from investment into the franchise over the next two years would not be fully recovered during the life of the contract.

Stagecoach, which won its East Coast rail franchise in the same bidding round as Go-Ahead’s Thameslink contract, was down 5.5% to 234.5p.

Telecom Plus, the utility bundle reseller, lost 6.7% to 950p after full-year earnings came in at the low end of guidance. Customer growth fell to just 1.2%, from about 20% in late 2013 when the company locked itself into a supply contract with Npower — a deal some analysts believe has blunted competitiveness.From Business Day Live 

Read more about: steinhoff | retail | poundland | london | investec | brait

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