Tesco holds talks to buy up to 150 Poundland shops with 12,000 jobs at risk as the chain faces a break-up

Tesco is in talks to acquire as many as 150 Poundland stores as the discount chain edges closer to collapse. Gordon Brothers, the US private equity firm that bought Poundland for £1 last year, has rejected a management-backed rescue bid from Irish firm Martin Property Group — a decision Business Secretary Jonathan Reynolds says leaves the owner with "serious questions to answer." Poundland founder Steve Smith, who set up the chain in 1990, says the business "can be saved" and sales are up nearly 7% like-for-like, but Gordon Brothers has stopped funding the company and a break-up looks increasingly likely.

Poundstretcher owner Fortress is eyeing up to 250 shops, while Iceland, Lidl, B&M and CDS Superstores have also expressed interest in individual sites.

Business Minister Kate Dearden is to meet Poundland executives this week in a fact-finding session, though the government has conceded it has limited scope to intervene in a commercial deal.

Labour MP Liam Byrne warned that the 12,000 jobs at risk dwarf those lost at British Steel by a factor of three, calling on ministers to act "pretty sharpish" to prevent Gordon Brothers sacrificing those workers "for a bumper Christmas."