Freshfields Bruckhaus Deringer and Linklaters will pick up £4.5m in fees as Poundland accepts Steinhoff’s new and final offer for £466m.
The fees follow a lengthy bidding process initiated by Steinhoff, which was forced to up its valuation of Poundland to £610.4m.
The increase in price is understood to have followed intervention from US hedge fund manager Elliott, which upped its stake in Poundland last month.
South African conglomerate Steinhoff was advised by Linklaters’ soon-to-be senior partner Charlie Jacobs and the magic circle firm is expected to receive £2.7m for its work on the transaction.
Travers Smith will also pick up some of the proceeds, having worked with the banks on the cash confirmation side. The team was led by partner Andrew Gregson, who acted alongside partners Andrew Gillen and Philip Cheveley.
In total, Steinhoff is due to pay between £7.6m and £9m for professional support throughout the offer, while Poundland’s total costs are expected to be slightly higher at around £8.3m to £9.8m.
Poundland’s legal bills are nevertheless slightly lower at £1.8m, with both Linklaters and Freshfields charging their services by hourly and daily rates.
Freshfields partner Ollie Lazenby acted for Poundland, having worked with the discount chain last year on its purchase of 99p Stores.
The 99p Store deal strengthened Poundland’s position as Europe’s largest single-price discounter, but the transaction was “more capital intensive” and “needed more attention from management than expected”, according to the scheme document.
The challenges are understood to have left Poundland open to the recent takeover, with bidder Steinhoff one of the most acquisitive retailers in the market. The company has been looking to diversify geographically in the last 12 months, looking for assets with developed infrastructure.
Other purchases this year include US company Mattress Firm, which Steinhoff bought for $4.2bn in early August. Linklaters advised Steinhoff from New York.
Steinhoff also battled Sainsbury’s to purchase Home Retail Group in February, however it turned to Travers Smith on its bid as Linklaters advised the target.
Steinhoff lost the bidding war for Home Retail and also failed to win a three-way tussle for electrical retailer Darty. The company had been late into discussions with Home Retail and Darty, although is understood to have been the only bidder for Poundland.
Earlier this month The Lawyer revealed the biggest legal fees on UK M&A so far this year. Despite Softbank spending £24bn to acquire ARM Holdings, the £14.5m legal fees involved were dwarfed by the fees on the Rexam and Ball Group merger, with law firms including Freshfields and Skadden Arps Slate Meagher & Flom pocketing £69.8m from the deal.
