Budget retailer Poundland has agreed a £55m deal to buy 99p Stores depending on approval from the Competition and Markets Authority (CMA).
The £55m offer includes a cash consideration of £47.5m and the issue of new Poundland Shares with a value of £7.5m. The £47.5m and cash cost associated with the integration and restructuring of 99p Stores will be funded by an equity placing.
The proposed transaction includes 99p Stores’ network of 251 stores and its warehouse and distribution centre.
The CMA is set to review the proposition and commence its public consolation and review process, which is expected to take at least two months.
Jim McCarthy, chief executive of Poundland, said: “This is a good deal for both businesses and will benefit customers and shareholders. 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.”