ScS Group, the Sunderland-based furniture and floorings company, said its board has agreed to a takeover offer worth £99.4 million from Italian firm Poltronesofà S.p.A.

Poltronesofa has offered to pay £2.80 per ScS share — £2.70 in cash plus a 10p final dividend from ScS for the year ended July 29, 2023, which is not conditional on the acquisition becoming effective.

ScS shares rose about 60% to 271p.

The transaction value represents a premium of 66% to the closing price per ScS Share of £1.69 pence on October 23.

Established in Reggio Emilia in 1995, Poltronesofà has become a leading sofa retailer in Italy and one of the leading sofa retailers in Europe.

It designs and sells sofas and armchairs, as well as sofa beds and decorative accessories and retails them through its 167 stores in Italy, 106 stores in France and 27 further stores across Europe – 15 in Belgium, nine in Switzerland, two in Cyprus and one in Malta.

Poltronesofà CEO Renzo Ricci said: “As the next step of Poltronesofà’s pan-European expansion, the acquisition represents the best opportunity for Poltronesofà to enter the United Kingdom market of upholstery products.

“Poltronesofà believes it is strategically very well placed to support ScS in the next stage of its development, and by building on the combined industry knowledge and experience and providing the necessary capital to accelerate ScS’s ambitions, the Acquisition will help ScS realise its full growth potential.”

ScS chair Alan Smith said: “This cash offer, which the ScS Board unanimously recommends, comes at an attractive valuation.

“It recognises the quality of the ScS Group’s operations, its cash resources, and the progress accomplished under Steve Carson’s leadership via his refreshed strategy.

“Poltronesofà, based in Italy, is a pan-European sofa retailer that has been successfully pursuing international expansion and ScS, with UK operations, is the next juncture of that strategy.

“The ScS Board believes Poltronesofà will bring significant benefits to ScS through its broad industry expertise in addition to providing the necessary capital that would accelerate our current strategy, albeit in a private rather than public sphere.

“The acquisition will enable ScS to continue as part of a broader, pan-European entity in pursuit of its strategy and position it for long-term success in the UK.”