A South African retailer has agreed terms in a stg£597m (€715m) takeover of discount retailer Poundland.

Poundland trades under the Dealz brand in the Republic of Ireland.

Steinhoff International said the chain, which has more than 900 stores across Ireland and the UK, would be a "complementary fit" for its growth ambitions across Europe.

Its all-cash offer of 222p per share represents a premium of more than 13% on the closing price for shares on Tuesday.

The Poundland board is recommending investors accept it. It had dismissed a previous offer on value grounds.

Steinhoff, which already owns British furniture firm Harvey's and the Bensons for Beds chain, had made an offer earlier this year for the company behind Argos but lost out to Sainsbury's.

It was was also outbid for London-listed white goods retailer Darty.

Poundland - which benefited from a boost to business amid the financial crisis and resulting recession - has been struggling in more recent times followings its troubled stg£55m (€65.8m) purchase of rival 99p Stores.

It has spent big on converting those shops to its own brand and same-store sales fell 4% in the year to March however total sales were boosted by the integration of its one-time rival.

Steinhoff is backed by South African billionaire Christo Wiese whose Brait investment group also owns controlling stakes in Virgin Active, New Look and food chain Iceland.

It gave no indication of major changes ahead - saying it "recognised the value" of the existing management team at Poundland.

Darren Shapland, chairman of Poundland, said: "The Poundland board believes (the) all-cash offer presents Poundland shareholders with an opportunity to realise their shareholding at a certain and attractive price, securing earlier delivery of the Poundland Group's medium term value than could be expected from the ongoing turnaround process against a background of increasing economic uncertainty in the UK and a more challenging trading environment".

He added: "They share our vision for the growth and expansion of Poundland and, as such, we believe they are a suitable and appropriate partner for our colleagues, our suppliers and stakeholders".

Poundland announced its expansion into the Republic of Ireland in August 2011 - Dealz now has over 60 stores here.