Poundland's £55m takeover of rival 99p stores cleared by competition watchdog

The Competition and Marketing Authority had expressed doubts about impact of a deal

Shoppers can pick up a bargain but that may not be the case in the float

Poundland’s £55m takeover of rival 99p Stores has finally been given the go-ahead by the competition watchdog after a four-month investigation.

The Competition and Marketing Authority (CMA) had expressed doubts in February about the impact of a deal on consumer choice in the pound-shop market.

But on Tuesday it said an in-depth study had found that there were enough multi-priced discount retailers, along with Tesco and Asda, to provide suitable competition.

Poundland welcomed the ruling, which will bring the company’s portfolio of stores up to 800 and a step closer to its goal of 1,000 in the UK.

Shares in the company jumped 4.7 per cent on the news to 345.5p. But they remain a long way off their 418.9p high when the takeover was announced in February.

The independent analyst Nick Bubb said: “It has taken an awfully long time for the penny to drop at the CMA about just how much competition Poundland and 99p Stores face from other value retailers.”