Discount supermarket Lidl has tabled a bid for a single Poundland shop in the hope of scooping up more stores if the retailer is broken up, City AM has learned.
The German grocery chain has put in an offer to Gordon Brothers, which owns the retailer, in which it would initially buy one store if the company’s sale process fails and it is broken up, City AM understands.
Lidl’s bid would then allow it “cherry pick” a further small number of Poundland stores if the company ended up being split up between a number of individual buyers, according to sources close to the sale process.
The German discounter is one of a number of retailers who are vying for a break-up of Poundland. Between six and eight retailers have put in bids for some of its stores, the sources said.
It had been reported that Aldi, Lidl’s rival, was considering putting in a bid but City AM understands it is not in talks with Gordon Brothers.
Lidl’s involvement in Poundland’s sale comes as the discount supermarket plans to open more than 50 stores in the next year. The grocer has been growing its market share as rival UK supermarkets see their presence in the sector stall.
While Lidl and others have only proposed to buy a specific number of Poundland’s sites, other bidders are proposing to buy hundreds of its shops.
The owner of The Range and Wilko is among the retail heavyweights battling for control of the discount retailer, The Times has reported. Chris Dawson’s CDS Superstores had been weighing a bid for the entirety of Poundland but is now only interested in parts of the business and a limited number of its locations.
Beyond the retailers hoping to snap up extra sites from Poundland’s sale, a number of investment groups have tabled bids for the business.
Directors parachuted in as sale speeds up
Poundland’s management have expressed preference for a bid tabled by Martin Property Group (MPG), the Irish firm which recently bought National Car Parks (NCP).
The discount retailer has parachuted in three independent directors to join its board, Sky News first reported. These new members are Andrew Kirkpatrick, Stephen Welch and Dominic Young.
These directors have been added to the board to address concerns among MPG’s rival bidders that its two existing members, Barry Williams and Shaun Wills, have publicly expressed support for one of the proposals.
The presence of additional experts on Poundland’s board is intended to offer reassurance to bidders that their proposals will be considered fairly.
A spokesperson for Gordon Brothers said: “After commencing a thorough sale process for the entirety of the company, prompted by interest from several parties, active discussions continue with a number of potential acquirers.
“The offers include those from buyers for the whole business and also indicative offers for significant viable parts of the business from established retail operators.
“The Board will now objectively evaluate these options, considering all relevant stakeholders, with a view to minimising uncertainty for the people, suppliers and local communities with an interest in the business and its future.”
Gordon Brothers kicked off its sale of Poundland last month, little more than a year after buying the company for a nominal £1 fee from retail group PepCo.
Advisors Alvarez & Marsal, who were appointed to run the sale, are weighing up bids from a number of buyers. These include proposals to carve up the business and offers for the entirety of the company.
Poundstretcher owner Fortress Investment Group and TG Jones owner Modella Capital are among the other parties who have expressed an interest in Poundland.
Poundland and Lidl were contacted for comment. Alvarez & Marsal declined to comment.