Britain’s budget chain Poundland is looking to snap up rival group 99p Stores for £55 million in a deal underlining the nation’s booming discount retail sector.
The group, which floated on the London stock market last year, announced that it has agreed to buy the family-owned 99p Stores chain in a cash-and-shares deal.
Poundland, which charges one pound per item, operates a network of almost 600 stores across Britain and Ireland with an estimated five million customers per week.
Rival chain 99p Stores, which sells items at 99 pence each, has 251 branches and around two million weekly customers.
The family run business 99p Stores, headed by its chief executive Nadir Lalani and sons Hussein Lalani, commercial director and Faisal Lalani, managing director, were the 96th richest Asians in the 2014 Asian Rich List, published by Eastern Eye.
“This is a good deal for both businesses and will benefit customers and shareholders,” said Poundland chief executive Jim McCarthy.
“Through working together, Poundland will improve choice, value and service for 99p Stores’ customers, bringing Poundland’s proven know-how and range to 99p Stores.
“We also believe that we can improve the performance of the 99p Stores estate and generate further value for Poundland’s shareholders.”
Poundland will pay £47.5 million in cash plus 7.5 million in new shares, while the deal will be partly funded by a share placing but remains subject to regulatory approval.
Discount chains boomed in Britain during the economic downturn, as consumers tightened their belts to save cash, and remain popular.