Second buyer makes rescue bid for Poundland as retailer faces collapse
A little-known investment group has made a bid to buy the business.
A second buyer has stepped in with a rescue offer for Poundland as the discount chain edges toward collapse, putting thousands of jobs at risk.
London-based Xyra Group has proposed paying off half of Poundland’s outstanding debts straight away, a major issue in the takeover discussions so far. The remainder would be postponed.
With Poundland close to failure, its US owners Gordon Brothers have already turned down a competing bid from an Irish property group that would have protected its 12,000 employees.
Gordon Brothers said the company has endured years of instability and “remains challenged and vulnerable”.
People familiar with the proposal said Xyra is offering to immediately clear £12.5m of a £30m loan still on Poundland’s books.
The offer came as Business Secretary Jonathan Reynolds held urgent talks with Gordon Brothers over the company’s future, pressing the investment firm to safeguard staff wherever possible.
Gordon Brothers, which bought Poundland for £1 last June, said at the meeting that it would prioritise bids that protect its stores and workers.
The company said: “We are pursuing all avenues through the sale process to find a solution which protects as many jobs as possible and preserves value. Work continues at pace, engaging in active discussions on offers with interested parties.”
Xyra is offering to repay a larger share of Poundland’s debts than Martin Property Group, which had previously put forward a bid that Gordon Brothers rejected.
However, questions remain over how credible Xyra’s offer is, with little evidence that it meets Gordon Brothers’ requirements, including whether it has the funds and whether it would be a suitable long-term owner of Poundland.
Sources pointed to the appointment of Andrew Brode to Xyra’s board as evidence of its credibility. Brode works for RWS, a company that supplies AI solutions to businesses.
Gordon Brothers said: “Our intent throughout the comprehensive sale process has been to protect as many jobs as possible and preserve value in order to deliver the best available outcome for all the people, creditors and local communities who care about this business as much as we do.”
Both Reynolds and Prime Minister Andy Burnham have asked why a deal for Poundland’s future has still not been reached.
Although Xyra has made an offer to buy the entire business, it is not clear whether it would keep Poundland intact under its ownership or split the company up.
Several Poundland suppliers have said they would also go bust if the retailer collapses. Its founder Steve Smith said two or three thousand suppliers to the firm, those who work solely for Poundland, would be caught up in the collapse.
He added that in that scenario, not only would Poundland’s 12,000 staff be affected, but potentially as many as 30,000 people in total.