UK Prime Minister asks why Poundland rescue offer was rejected as administrators filed
The prime minister and a parliamentary committee chair have called for an explanation after Poundland's US owner filed a notice to appoint administrators, putting thousands of jobs at risk.
The British prime minister has asked for an explanation from Gordon Brothers, the U.S. owner of discount retailer Poundland, after the company filed a notice of intent to appoint administrators. The filing triggers a ten-day moratorium that prevents creditors from taking legal action and raises the prospect that the business could be broken up and sold in parts.
Poundland, which operates around 600 stores across the United Kingdom and Ireland, confirmed the notice on Thursday and said it had engaged AlixPartners to oversee the process. The retailer said it had been unable to secure an acceptable offer for the business as a whole.
"This is a deeply worrying time for Poundland staff and their families. We want to see jobs protected. If there was a potential owner to avoid this that hasn’t been accepted, then the business secretary and I want to know why that is the case. We stand ready to support the workforce however we can," the prime minister said.
Liam Byrne, chair of the Commons business and trade committee, questioned the owners' decision, noting reports of a credible offer to purchase the chain as a going concern. He added that three directors hired as restructuring experts had resigned after two weeks and that the owners were reportedly seeking repayment of a £30 million shareholder loan taken as part of the £1 purchase of the company less than 18 months ago.
Gordon Brothers had previously rejected a solvent takeover proposal from Martin Property Group, an Irish real-estate firm named by management as the preferred bidder. The dispute reportedly centred on the repayment terms of the shareholder loan.
Three independent directors appointed to guide the sale process quit this week, citing concerns that the owners were steering Poundland toward insolvency. Barry Williams, Poundland’s managing director, described the situation to staff as "unexpected, unwanted and wholly avoidable."
Other parties, including Fortress Investment Group, CDS Superstores, Lidl, Aldi and Modella, have expressed interest in acquiring parts of Poundland’s store estate.