Poundland is set to buy rival discount retailer, 99p Stores in a £55m cash and shares deal 14 years after the family-run chain was founded. Poundland will also pick up a warehouse and distribution centre in the transaction.
The soon-to-be- acquired company now operates 251 shops, which trade as 99p Stores and Family Bargains, and serve over two million customers. Over time, the 99p Stores will be converted to Poundland shops, a spokeswoman for the firm said.
Annual sales were £370.4m in the year to February 1 last year and underlying earnings were £6.1m.
99p Stores announced last October that it was expanding its grocery offer in its largest investment programme. It has introduced fresh produce, including bagged fruit and vegetables, in an aim to take on convenience supermarkets.
Poundland floated in March with an initial offer price of 300p per share. Yesterday shares closed at 357.8p and rose over 7.5% in early trading today to 384.9p.
Since 1990, Poundland has opened almost 600 shops in the UK, Ireland and Spain, and plans to open 16 new shops per year for the next two years in the UK and Ireland.