Several bidders will table offers for Poundland on Friday, as the owners of the discount retailer seek £30m for the company they bought for just £1. 

Multiple suitors are expected to hand their bids to Gordon Brothers, which owns Poundland, on Friday, as the US investment firm rushes to complete a deal before the Christmas trading period. 

The bids expected on Friday will cover a “vastly significant portion” of Poundland’s 600 stores, if not the entirety of the business, a person close to the process told City AM. 

Gordon Brothers is demanding £30m for the discount retailer to cover a shareholder loan of that amount which it inherited from Pepco, Poundland’s previous owners. The majority of potential bidders have not raised concerns over funding this loan.

Modella Capital, the Mayfair-based private equity firm which snapped up WH Smith’s former high street stores last year, is among the interested parties, it is understood. 

The investor renamed its former WH Smith stores to TG Jones but they have been struggling in recent months, prompting Modella to push through a divisive restructuring deal which could close 150 shops. 

US private equity firm Fortress, which owns US discount chain Poundstretcher, has also been in talks over submitting a bid, as first reported by the Financial Times.

On Thursday, City AM revealed that Gordon Brothers is considering a separate sale for Poundland’s 70 stores in the Republic of Ireland, which trade under the Dealz brand.

The investment firm had been initially planning to sell Poundland’s UK and Ireland operations together but has seen significant interest in its Irish business.  

Poundland turning a corner, say owners

Gordon Brothers is also weighing up a sale to Poundland’s bosses as part of a management buyout (MBO).

Gordon Brothers have appointed advisors Alvarez & Marsal to prepare a list of formal bids by the end of this month, in the hopes of signing a deal before fourth quarter trading begins.

Poundland has faced a difficult period in recent years, which its current owners have blamed on a challenging economic environment and a drastic restructuring. 

The firm fell to an £85m pre-tax loss in the year to September, nearly doubling its £45m shortfall in the prior year. The group’s sales slipped 12 per cent to £1.5bn. 

The company’s directors blamed its widening loss on “difficult trading conditions” and a “significant programme of restructuring”. 

Barry Williams, Poundland’s managing director, has said that the retailer is working to rebuild trust with its customers. “We’re making very significant progress as we deliver the ranges and price simplicity they demand of us.”

Gordon Brothers and Alvarez & Marsal declined to comment.