LONDON (Reuters) - The boss of Pepco Group, the owner of British discount retailer Poundland, said it was “almost inevitable” the group would be sold by its beleaguered South African parent Steinhoff (SNHJ.J).
Steinhoff, which has been battling the fallout from a 2017 accounting scandal, said last year it was evaluating a range of strategic options for Pepco Group, including a potential public listing.
On Monday Sky News reported that three private equity firms - Advent International, Hellman & Friedman and Mid Europa Partners - had teamed up for a possible bid for Pepco that could value it at more than 4.5 billion euros ($5 billion).
“The restructuring arrangement that Steinhoff has with its creditors means it’s almost inevitable we’ll be sold,” Pepco Group CEO Andy Bond told Reuters on Wednesday after it updated on Christmas trading.
He said he was “genuinely open minded” on the various disposal options - a private equity sale, initial public offering, or trade sale to an industry peer - and added that it was “early days” in the process.
Bond, a former boss of supermarket group Asda, said if Pepco did get new owners, he wanted to stay on.
“I’ve helped build this business. It’s a great business and I will want to continue to deliver our ambition to be Europe’s biggest discount variety business,” he said.
Pepco Group, which also owns the PEPCO and Dealz brands in Europe, reported a jump in revenue in the Christmas quarter and forecast more growth in the rest of its 2019-20 financial year.
Revenue in its fiscal first quarter to the end of December rose 13.3% to 1.143 billion euros, reflecting a 14.8% increase in stores to 2,809, along with a rise in like-for-like revenue of 3.9%.
The group highlighted the increased size of its PEPCO store portfolio in Central and Eastern Europe, the start of the roll-out of the Dealz format in both Poland and Spain, and reduced operating costs within Poundland, including the renegotiation of a further 36 store leases.
The group is focused on expanding the PEPCO brand, which currently trades from 1,898 stores, to fuel growth.
Bond said he was targeting the opening 300 PEPCO stores a year over the next decade.
Reporting by James Davey; Editing by Louise Heavens and Pravin Char