Poundland weighs bids as union warns chain could fall into administration
Poundland's owner, Gordon Brothers, is weighing bids for the discount chain, BBC News, PA Media and City AM reported. The chain's bosses back a bid from Martin Property Group, an Irish real estate firm. The shop workers' union Usdaw has warned that Poundland could go into administration if a deal fails, the BBC and PA said.
Poundland's owner, US investment firm Gordon Brothers, is weighing offers for the discount chain, BBC News, PA Media and City AM reported. Poundland's management favors a bid from Martin Property Group, an Irish real estate firm, the three outlets reported.
Gordon Brothers bought Poundland last year for £1, the outlets reported. BBC News and City AM reported that it bought the chain from Pepco. Gordon Brothers has hired advisers Alvarez & Marsal to find a buyer, PA Media and City AM reported.
The shopworkers' union Usdaw has warned that Poundland could go into administration. "There are deep concerns that the business could go into administration, which would be a disaster for our members," said Bally Auluk, a national officer at Usdaw, according to PA Media. Auluk said offers tied to a management buyout were "being turned down," the BBC and PA reported. A Poundland source disputed that, the BBC reported. PA Media reported that advisers still hope to strike a deal that avoids administration.
Other bidders are circling. Fortress, which owns Poundstretcher, and Modella Capital, the owner of TG Jones, have shown interest, PA Media and City AM reported. City AM reported on October 15 that Lidl has bid for one Poundland store, with the option to pick more if the chain is broken up. Between six and eight retailers have bid for some of its stores, City AM reported, citing sources.
Gordon Brothers has also added three new directors to Poundland's board, PA Media and City AM reported. They are meant to reassure rival bidders that offers will be judged fairly, since its two existing board members have publicly backed one bid, City AM reported.
"The Board will now objectively evaluate these options," a Gordon Brothers spokesperson said, according to City AM. PA Media reported on October 15 that three bidders, including Martin Property Group, remained in talks to buy the whole business and that a deal could come as early as the week of October 19.
Poundland has about 600 stores in the UK and Ireland and 12,000 employees, the BBC reported. Managing director Barry Williams said earlier this month that sales growth showed the chain's recovery plan "is working," the BBC reported.
What we know: Gordon Brothers is weighing bids for Poundland, and management favors Martin Property Group.
What we don't: Which bid will win, and whether the chain will avoid administration.
Where outlets agree BBC News, PA Media and City AM report that Gordon Brothers is weighing bids for Poundland and that management favors Martin Property Group.
Where they differ The outlets cited here report the same key facts so far.