Poundland Faces Administration Amid Rejected Takeover Bid
Owner Gordon Brothers declined an offer from Martin Property Group, pushing the discount retailer towards insolvency proceedings.
Callum Smith
Poundland is preparing to file a notice of intention to appoint administrators.
The retailer appointed advisers at AlixPartners to oversee the insolvency process. These advisers will assess offers to buy all or parts of the business.
This legal step provides 10 working days of breathing space from creditors. It aims to secure a potential rescue deal.
Barry Williams stated the situation is 'unexpected, unwanted and wholly avoidable.' Gordon Brothers had overseen a major turnaround programme at Poundland, closing more than 100 shops over the past year to shore up its finances.
unexpected, unwanted and wholly avoidable.
Gordon Brothers took on £30 million in debts when it acquired the chain. The firm also hired Alvarez & Marsal in August to oversee a sale of the business at a reported price of £30 million.
Wilko and The Range owner CDS Superstores, Poundstretcher owner Fortress, and TG Jones owner Modella all show interest in buying parts of the Poundland business. Martin Property Group was named the preferred bidder by management earlier this month.
Poundland has not yet filed the notice of intention to appoint administrators. The company prepares to do so imminently.
A court is expected to approve the legal measure protecting the company from creditors on Thursday.