Discount supermarket Lidl has submitted an offer for a single Poundland store, with a view to acquiring further sites should the struggling retailer be broken up, City AM has reported.
The German grocery giant has lodged a bid with Gordon Brothers, Poundland's owner, under which it would initially purchase one store if the company's sale process collapses and the chain is dismantled, City AM understands.
Lidl's proposal would then grant it the opportunity to "cherry pick" a handful of additional Poundland outlets should the business ultimately be divided amongst several separate buyers, according to insiders close to the sale proceedings.
Multiple bidders circling
The German discounter is one of several retailers jostling for a slice of Poundland in the event of a break up. Between six and eight retailers have submitted bids for a portion of its stores, sources confirmed.
While rival discounter Aldi had been reported to be weighing up a potential bid, City AM understands it is not currently in discussions with Gordon Brothers, as reported by City AM.
Lidl's interest in Poundland's sale comes as the budget supermarket pushes ahead with plans to open more than 50 new stores over the coming year. The grocer has been steadily growing its market share as competing UK supermarkets find their foothold in the sector beginning to falter.
Range of offers tabled
While Lidl and certain other parties have proposed acquiring only a select number of Poundland's locations, rival bidders are understood to be tabling offers for hundreds of its shops. The owner of The Range and Wilko is among the retail heavyweights vying for control of the discount chain, according to a report in The Times.
Chris Dawson's CDS Superstores had been weighing up a bid for the whole of Poundland but is now understood to be interested only in select parts of the business and a handful of its stores.
Beyond the retailers seeking to acquire additional sites through Poundland's sale process, several investment groups have also submitted bids for the business.
Board changes and sale process
Poundland's management has signalled a preference for a bid put forward by Martin Property Group (MPG), the Irish firm which recently acquired National Car Parks (NCP).
The discount retailer has brought in three independent directors to bolster its board, Sky News first reported. The new appointees are Andrew Kirkpatrick, Stephen Welch and Dominic Young.
The trio have been added to address concerns amongst MPG's rival bidders that its two existing board members, Barry Williams and Shaun Wills, have publicly voiced support for one of the competing proposals.
The addition of further experienced figures to Poundland's board is designed to provide assurance to prospective bidders that all submissions will be assessed on an equal footing.
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 launched its sale of Poundland last month, just over a year after acquiring the retailer for a nominal £1 fee from retail group PepCo.
Appointed advisors Alvarez & Marsal, who are overseeing the sale process, are currently assessing bids from several prospective buyers. These range from proposals to break up the business to offers for the company in its entirety.
Poundstretcher owner Fortress Investment Group and TG Jones owner Modella Capital are amongst the other parties that have signalled an interest in acquiring Poundland.
Poundland and Lidl were contacted for comment. Alvarez & Marsal declined to comment.
