Multiple bidders are expected to table offers for the discount retailer Poundland today, as its owner, US investment firm Gordon Brothers, seeks £30m for the company. Gordon Brothers, which bought Poundland for £1, aims to complete a deal before the Christmas trading period.
The bids anticipated today are expected to cover a “vastly significant portion” of Poundland’s 600 stores, potentially including the entire business. Gordon Brothers is demanding £30m to cover a shareholder loan of that amount inherited from previous owners, Pepco.
Among the interested parties are Modella Capital, a Mayfair-based private equity firm, and US private equity firm Fortress, which owns the US discount chain Poundstretcher. Gordon Brothers is also considering a separate sale for Poundland’s 70 stores in the Republic of Ireland, which operate under the Dealz brand, and a potential management buyout.
Poundland reported an £85m pre-tax loss in the year to September, nearly doubling the £45m shortfall from the previous year, with sales slipping 12 per cent to £1.5bn. Directors attributed the widening loss to “difficult trading conditions” and a “significant programme of restructuring.”