UK Markets close in 37 mins

Poundland circled by private equity as boss considers buyout

Ashley Armstrong
Poundland could be on the block as South African parent Steinhoff looks to repair its balance sheet following its accounting scandal

Private equity firms have begun circling Poundland amid expectations that its scandal-ridden South African owner could be forced to sell the high street chain.

It is understood that Advent, Apax, Bain, Clayton Dubillier & Rice, CVC and KKR are monitoring the situation closely in case Steinhoff’s financial woes mean it suddenly has to raise further cash.

Since the South African outfit was plunged into chaos last month, Poundland has been distancing itself from the financial problems of its parent: It has ­secured £180m from Davidson Kempner to fund its expansion plans and toasted record Christmas sales.

Former Asda boss Andy Bond (left) launched discount fashion chain Pep & Co in the UK before launching a bid for Poundland in 2016

Poundland boss Andy Bond has also been sounding out financial backers, including turnaround firm Alteri, about a potential management buyout of the business, which would enable the UK company to take charge of its own future.

It is understood that former boss Jim McCarthy has also been approached by private equity houses to advise on takeover.

Jim McCarthy, former boss of Poundland

One private equity source said that Poundland offered a rare opportunity to gain exposure to the fast-growing discount sector.

Mr Bond has spent the past two years expanding the low-cost fashion chain Pep&Co, which he launched in the UK before overseeing Steinhoff’s acquisition of Poundland. A decision about Poundland’s future is three to six months away as Steinhoff is still locked in talks with its lenders about a refinancing of its £10bn debt pile.

Steinhoff analysis