Warburg Pincus [WP.UL], a private equity firm, announced on Wednesday that it sold 35 million shares of Poundland, the British variety store chain, cutting its stake from 30.4 to 16.4 percent, Reuters reported. The firm said the move brought in $216 million.
Nevertheless, Warburg Pincus insisted it remained “a significant and supportive shareholder of [Poundland], its management team and strategy.”
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Here’s the strategy:
Discount food and general merchandise services have been increasing their market share in the UK, much like the rest of the world. Last Friday, Poundland announced it was going to buy 99p Stores, a smaller discount chain, for $84 million, resulting in a 15 percent jump in the latter’s share price.
At this point, Poundland shares were down 5.2 percent Wednesday morning, but stay tuned.
