Martin Property Group is in discussions with Poundland’s senior leadership about a solvent acquisition of the UK discount retailer, reported Sky News.
The Irish real estate firm is understood to be the financial backer of a management-led buyout.
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Alvarez & Marsal is said to be running the sale for investment firm Gordon Brothers.
Gordon Brothers started the auction last month, about a year after it bought the chain.
Under the proposed terms, Martin Property Group would take Poundland’s equity for a nominal fee, repay outstanding debt, and provide multi-million-pound turnaround capital.
The company has committed to protecting the retailer’s 12,000 employees, its network of around 600 stores across the UK and Ireland, and its Makerfield distribution facility.
Gordon Brothers is also seeking full repayment of a £30m shareholder loan, which it originally secured for £1 ($1.32).
According to the report, Poundland managing director Barry Williams told staff in an internal communication that management had “expressed a preference for one of the bidders who we’ve met and in whom we believe would be the best party to work with”.
If the deal goes ahead, Andy Bond, the former chief executive of Pepco Group, is expected to return to the retailer, probably as chairman.
Polish retailer Pepco holds a minority stake in Poundland.
Other interested parties include turnaround investors Hilco Capital and Modella Capital, as well as Fortress Investment Group, the owner of Poundstretcher.
A break-up of the chain is also a possibility, with discount supermarkets including Lidl believed to be keen on several individual Poundland shops.
Gordon Brothers executives, including the former Mothercare boss Mark Newton-Jones and Frank Morton, its chief investment officer, were hoping to reach a decision on a preferred route for the business as early as next week.
Industry sources warn that if a solvent deal with Martin Property Group is not concluded, a pre-pack administration could be forced ahead of peak Christmas trading.
