Poundland could be broken up and face insolvency as bids assessed

Discount retailer Poundland could face being broken up as its owners consider offers for parts of the business.

It is understood that owner Gordon Brothers, which only bought the business last year for £1, is currently leaning away from the main solvent takeover offer for the business, meaning the group could enter insolvency in the coming days.

The private equity company launched a sale process for Poundland last month after turnaround efforts, which included shutting a raft of stores.

Irish real estate firm Martin Property Group was named as the preferred bidder by management earlier this month.

However, it is understood that the bid from Martin is not fully funded and would involve deferred payments.

Gordon Brothers is therefore assessing a number of other bids, largely from retail rivals, which would involve buying parts of the Poundland business and ultimately see the company enter insolvency.

Wilko and The Range owner CDS Superstores, Poundstretcher owner Fortress and TG Jones owner Modella are all among companies interested in buying parts of the retailer.

A spokesman for Gordon Brothers said: “While Martin Property Group had been identified as the preferred bidder by Poundland’s management team, attention must now turn to other active bids.

“As well as interest from buyers for the whole business, the sale process has also surfaced a number of formal and indicative offers for significant viable parts of the business from established retail operators.

“These options will now be objectively evaluated, with a view to minimising uncertainty for Poundland’s people and all relevant stakeholders.”

Poundland currently runs around 600 stores across the UK, employing around 12,000 workers.