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* Poundland would be "good fit" - Steinhoff chairman
* Steinhoff twice failed to clinch deals in Europe
* Warburg Pincus has sold remaining Poundland stake
* Approach disclosed on eve of Poundland results (Adds Steinhoff confirmation of share acquisition)
By Tiisetso Motsoeneng and Freya Berry
JOHANNESBURG/LONDON June 15 (Reuters) - South Africa'sSteinhoff has bought 23 percent of Poundland and is considering a full cash bid for the British no-frillshomeware chain in its latest attempt to expand in Europe.
Steinhoff, a $22 billion furniture conglomerate which haslost out in two high profile takeover battles already this year, said on Wednesday it had acquired 22.78 percent of Poundland,which sells every item at a single price point of 1 pound.
Under UK takeover rules, Steinhoff has until July 13 toannounce a firm intention to bid for all of Poundland, whosemain shareholder had been private equity firm Warburg Pincus,which said on Tuesday it had sold down its 15 percent stake.
Steinhoff, which has lost out to rivals in two battles forBritain's Home Retail and France's Darty inthe last three months, bought just over 61.2 million Poundlandshares, which would be worth around 120 million pounds at theclosing price. Poundland has a market capitalisation of around537 million pounds ($761 million).
Poundland shares closed up 2.2 percent higher at 200 pence,after rising around 25 percent on Tuesday. The stock is stilldown about 7 percent so far this year.
News of the South African company's latest move raisedquestions about its approach to expansion in Europe, where italready runs chains such as white goods retailer Conforama inFrance and furniture chain Harveys in Britain.
"There's seem to be no obvious strategic fit but it mightjust be a matter of adding discounted chains to its stablebecause that's essentially what they are: a discount retailer,"said Vestact's Sasha Naryshkine in Johannesburg.
South African retail mogul Christo Wiese, Steinhoff'schairman and biggest shareholder, told Reuters he was interestedin Poundland because it would be a "good fit" for Steinhoff,adding it had a disciplined approach to acquisitions.
POUNDLAND PRESSURE
Steinhoff, which sells beds and cupboards to lower-incomeshoppers in Europe, southern Africa and Asia, is keen to expandfurther in Europe, where pressure on consumer income has madeGerman's Aldi the continent's fastest growing supermarket chain.
Poundland, which is due to report annual earnings onThursday, would give Steinhoff a company with more than 900shops in Britain, Ireland and Spain but also one whose 1 billionannual sales have been under pressure.
Poundland's 2015 purchase of rival 99p Stores for 55 millionpounds has raised questions over its price model.
"Although Steinhoff has a proven track record of integratingbusinesses and improving their margins over time, we would seethis acquisition as higher than average risk given theincreasingly crowded UK variety discount space," said RBC EuropeLtd's analyst Richard Chamberlain.
Poundland, which competes with B&M, Home Bargains and Wilkoand Bargain Buys, told shareholders to take no action, notingthat there was no certainty an offer would be made.
Warburg Pincus originally listed Poundland in March 2014 at300 pence per share.($1 = 0.7059 pounds) (Additional reporting by Wendell Roelf in Cape Town; Editing byJane Merriman and Alexander Smith)
