Lidl eyes Poundland bargain as sale of discount retailer ramps up

Discount supermarket Lidl has submitted a proposal to purchase a single Poundland shop, with the goal of acquiring more stores if Poundland is divided up, according to City AM. The German grocery chain approached Gordon Brothers, the owner of Poundland, offering to buy one store if the sale process is unsuccessful and the company is broken up.

Should Poundland be split between multiple buyers, Lidl's bid would allow it to "cherry pick" a few additional stores. Lidl is one of several retailers competing for a potential sale of Poundland. Between six and eight retailers have submitted bids for various stores, with Aldi, Lidl's rival, reportedly not in talks with Gordon Brothers.

Lidl's involvement in Poundland's sale coincides with the discount supermarket's plan to open over 50 new stores within the next year, as its rivals struggle to maintain their presence in the sector. While Lidl and other companies have only indicated interest in buying specific Poundland locations, other bidders have proposed acquiring hundreds of the retailer's shops.

The owner of The Range and Wilko, among other retail giants, is also competing for control of Poundland. Poundland's management prefers a bid from Irish firm Martin Property Group, which recently acquired National Car Parks. The company has added three independent directors to its board, aiming to provide assurance to potential buyers.

Gordon Brothers recently initiated a sale of the entire company after receiving interest from multiple parties, with advisors Alvarez & Marsal evaluating proposals. Other interested parties include Poundstretcher owner Fortress Investment Group and Modella Capital owner Modella Capital. Poundland and Lidl were asked for their commentary on the situation.