Poundland, the UK discount store chain Steinhoff International acquired for £610m in July 2016, wants to divorce itself from its scandal-ridden parent via a management buyout, UK newspaper The Telegraph reported.

Andy Bond, the former Asda CEO headhunted by Steinhoff who was appointed Poundland executive chairperson in November 2016, has approached various private equity firms to back a management buyout, The Telegraph reported.

Negotiations also involve former Poundland CEO Jim McCarthy, who retired before the chain was sold to Steinhoff.

The Telegraph said Bond had been sounding out numerous private equity firms to back a management buyout, including turnaround firm Alteri.

Other potential financiers listed by the newspaper were Advent, Apax, Bain, Clayton Dubilier & Rice, CVC and KKR.

"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," The Telegraph reported.

Steinhoff beat US hedge fund manager Elliott in a bidding war for Poundland two years ago, clinching the deal after raising its offer to £2.27 per share.

When the acquisition of Poundland was announced in 2016, then CEO Markus Jooste said in a media release: "We believe that there is significant merit in bringing Poundland into Steinhoff’s global network. Steinhoff is developing a fast-growing, price-led retail business across the UK and the rest of Europe. Poundland would be a complementary fit to this growth story."

The group recently sold its 17% stake in an online retailer, Showroomprivé, for half the €157.4m it paid in May 2017.

Please sign in or register to comment.