Tesco is considering a bid to buy up to 150 stores from the owners of stricken discount retailer Poundland.
Poundland filed a notice to appoint administrators on Thursday, which gave it 10 days of breathing space with creditors to explore a rescue deal.
According to Press Association sources, Tesco – the UK’s largest supermarket – held talks over the potential acquisition of a quarter of Poundland’s 600 UK and Ireland stores.
Tesco declined to comment.
Several other high street retailers are considering moves for Poundland stores after a management buyout backed by Ireland-based Martin Property Group was rejected by owner Gordon Brothers.
Poundland, which employs nearly 12,000 people, was bought for just £1 last summer from Pepco Group by the investment firm, which is reportedly demanding full repayment of a £30 million shareholder loan with any buyer of the business.
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Government ministers will meet with Poundland bosses this week to discuss their plans amid concerns that the chain will be broken up.
Poundstretcher owner Fortress is said to be interested in acquiring 250 shops, while other interested parties include Iceland, Lidl, CDS Superstores – owner of Wilko and The Range – and B&M.