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Steinhoff is attracting buyout firms for European discount retail unit: Bloomberg
Posted on Friday, 24 January 2020 14:39
Steinhoff International Holdings is planning a sale of its European retail unit, which runs Pepco and Poundland, in a deal that could be worth around EUR 4.00 billion, people close to the matter told Bloomberg.

According to the sources, Advent International and Partners Group Holding are among the private equity firms that have expressed interest in the assets.

Steinhoff has been sounding out potential buyers alongside pursuing an initial public offering (IPO) of the same business, the insiders noted.

No final decision has been made at this time, the people noted, cautioning there can be no guarantee the buyout firms will proceed with formal offers.

Bloomberg first cited people familiar with the situation in September 2019 as saying the group was reviewing a possible sale of UK clothing retailer Pepco.

One month later, it was suggested Steinhoff may instead decide to list 25.0 per cent via a stock market flotation that could value the entire company at USD 4.40 billion.

In January 2018 and September 2019, media reports also observed the company is weighing a sale or IPO of Poundland.

Both businesses are run under the Pepco Group, which has a presence in Poland, Romania, Spain, Bulgaria and the UK, with a total of 2,700 stores in 14 countries.

The unit is under the control of Andy Bond, the former chief executive of supermarket chain Asda.

According to Bloomberg, he thinks Pepco Group will increase its earnings before interest, taxes, depreciation and amortisation by 18.0 per cent to between EUR 320.00 million and EUR 330.00 million in the latest financial year, ended September 2019.

Zephyr, the M&A database published by Bureau van Dijk, shows there were 1,016 deals targeting retail trade companies based in Western Europe announced in 2019.

EssilorLuxottica agreed to acquire Netherlands-based optical goods retail store chain holding company GrandVision for EUR 5.47 billion in the largest of these.

Deals targeting Koninklijke Ahold Delhaize, BCA Marketplace and Supermarkets Italiani, among others, were also announced in 2019.

© Zephus Ltd