Poundland boss says 99p Stores deal could be in jeopardy

THE chief executive of Black Country-based one-price retailer Poundland has said the company has not ruled out the possibility of pulling out of plans to acquire rival 99p Stores.

The Willenhall retailer announced in February that it was planning to acquire the 99p Stores network in a £55m takeover.

However, last week, the Competition and Markets Authority announced it intended to review the takeover to ensure it did not breach competition rules. It is understood to be concerned about plans for where Poundland is planning to open new stores in areas where there are existing 99p Stores.

Jim McCarthy, chief executive, Poundland said he was surprised and disappointed by the decision and said the company was now considering its next step, although in an interview with The Telegraph he said the company was not short of options.
He has declined to rule out the prospect that Poundland could pull out of the 99p Store deal.

McCarthy told the newspaper: “I am disappointed and surprised, because my view is that we operate in a very competitive and changing retail environment.

“They have made a decision, we have to think about that now and what we do next.

“Before our board and advisers can form an overall view, we really have to give some quality time to thinking it through. We have got a lot of business to do, a lot of opportunities. It is not as though we are short of opportunities.”

When asked whether the deal was under threat, McCarthy said the CMA had given its verdict on ‘phase one’ of Poundland’s plan and the retailer’s job was now to consider to do next and ultimately what was right for the business going forward.

The CMA’s ruling means that Poundland must either agree to sell-off the stores in question, contest the CMA decision through a so-called “phase two investigation” that will last five months, or pull out of the takeover.

Shares in Poundland fell since the CMA revealed its concerns about the deal last Thursday.

The company has until Thursday to make a decision on what to do next.