Poundland’s (PNLD) near-£600m sale to South Africa’s Steinhoff Group could hasten its shift to becoming a multi-price format retailer, industry analysts predict.

Struggling Poundland announced on Thursday it had accepted Steinhoff’s 222p per share offer valuing the everything-for-a-pound chain at £597m.

Steinhoff has been eyeing European retail assets for some time, having missed out on Argos owner Home Retail to Sainsbury’s and white goods retailer Darty to France’s Fnac already this year.

In particular it had its sights set on the UK discount sector after establishing itself in international discount in South Africa, Australia, China and Eastern Europe through Pepkor and UK discount fashion though Pep&Co.

These operations have multiple price points and analysts suggested Steinhoff could push to increase variable prices at Poundland – particularly as its single-price model is coming under further pressure from the collapse in the pound and inability to pass on rising import costs to its customers.

Greg Bromley, Senior Analyst at Verdict Retail, said: “With a weaker pound set to increase overseas sourcing costs, Poundland’s adherence to its rigid price points could come under threat. A move to open more multi price stores seems likely.”

Credit Suisse said it envisaged “a much more rapid progression to multi-price” as did UBS retail analyst Adam Cochrane, who added that Steinhoff could also introduce Pep & Co concessions to boost Poundland’s instore product range.

Poundland is already trailing multi-priced items through its Poundland & More facia, the first of which opened in April, and an increasing number of ‘conditional spend’ promotions have appeared in regular stores since late 2014.

Steinhoff chairman Christo Wiese having previously owned UK multi-priced discounter Poundstretcher before exiting the business in 2009.

Credit Suisse said synergies from existing UK business were limited, given Steinhoff’s UK portfolio mainly consists of furniture and household goods retailers, such as Harveys furniture and Bensons for Beds. But the broker did expect central costs could be taken out through back office savings.

The deal needs approval from 75% of Poundland’s non-Steinhoff shareholders, but approval is expected with the offer being dubbed “a good result” by Liberum and a “good solution” by Jefferies.

The 222p a share offer represents a premium of more than 40% to Poundland’s closing price of 158.25p on 13 June before Steinhoff’s interest was made public.

However, Poundland floated at 300p per share in March 2014 and was trading at over 400p in March 2015 before its trading momentum fell off a cliff as it struggled to integrate its February 2015 acquisition of 99p Stores.

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