Steinhoff raises at least €1.9bn to allow more acquisitions

The Frankfurt-listed furniture and general merchandise retailer, which this year has agreed to buy Poundland in the UK and Mattress Firm in the US, was widely anticipated to be planning a fundraising but, at a price of €5.055 per share that offers no discount, the placing is larger than anticipated, though only 23% is being made available to institutional investors.

Steinhoff said it would use the proceeds to replace acquisition-related facilities from its recent deals, while Wiese has recently stated he continues to eye further purchases.

A total of €1.89bn is being placed with chairman Wiese and a black-economic-employment vehicle funded by the South African government's PIC pension fund.

Wiese is part-funding his increased stake with loans secured against 628m Steinhoff shares, while agreeing a lock-up of 60 days.

Just over €555m has been made available to institutional investors via an accelerated bookbuild that the bookrunners said was already covered.

Steinhoff's debt was recently estimated at €26bn even before the Poundland and Mattress acquisitions, though the company has as recently as 2014 coped with debts of €44bn.

Analysts at Credit Suisse said the fundraising provided "balance sheet flexi