After weeks of rumours that Poundland would soon be up for sale again, a little over a year after Gordon Brothers bought it, reports say the auction has now formally kicked off.
Reuters
And it’s expected that its current owner will want to find a buyer before the festive trading season gets under way in earnest with plenty of interest already seen from potential bidders.
It hasn’t been officially announce but Sky News said Alvarez & Marsal (A&M), which was appointed to advise Gordon Brothers last month, is seeking to tie up a deal before the end of next month.
Initial formal bids are expected in October for the business that currently operates around 600 stores and employs around 12,000 people.
It’s believed that serial acquirer Modella Capital is among the parties interested in buying the business. Poundland includes the Dealz chain in Ireland and Modella already owns Dealz in Poland, having recently bought it from previous Poundland owner Pepco. Buying Poundland in the UK and Dealz in Ireland would make sense.
Other unsolicited approaches have also been made but it’s unclear where these have come from, although both financial and retail bidders are expected to enter the fray.
Gordon Brothers paid just £1 for Poundland and no specific asking price has been suggested so far.
The business is in a much stronger position than it was a year ago with greater stability being seen and profitability on an EBITDA basis this year. It’s also back in store opening mode with its first opening post-acquisition having been announced in recent weeks. Despite that, it made an £85 million pre-tax loss in the year to September, almost double the prior year’s loss. Sales fell 12%, although the raft of store closures would have had a big impact there.
