A Poundland probe should not be discounted

Two for less than two quid. It sounds like the kind of offer shoppers expect to find on the shelves of a discount retailer, not a summary of its recent M&A activity.

That, though, has begun to look like being the ignominious fate awaiting Poundland, not much more than a decade since it was valued by London’s stock market at over £1bn. Having been sold for one Euro last year, it ‘s now about to change hands again, with the recipients this time a firm of administrators who will oversee a break-up.

Poundland’s last change of ownership, less than 18 months ago, saw it fall into the hands of Gordon Brothers, a turnaround investor which counts Laura Ashley and Radley among its past or former investments.

Except that Poundland hasn’t been, well, turned around – and the signs of revival it has shown in recent weeks appear to have been greeted with disdain, rather than relief, by its new owner.

So as administration looms, it looks like Gordon Brothers might have some tricky questions to answer. Its insistence that it gets paid out in full for a £30m shareholder loan for which it paid just a pound complicated the auction being run by Alvarez & Marsal, to say the least.

Interest in a solvent purchase of the whole company came from Martin Property Group, an Irish family-owned business. Unsurprisingly, while it was committed to preserving Poundland as a going concern, including retaining a distribution centre in Andy Burnham’s Makerfield constituency, it seems to have been less preoccupied with lining Gordon Brothers’ pockets.

Time now looks to have run out. As I reported on Sky News earlier this week, the impending resignation of three restructuring experts as Poundland directors after less than two weeks in post came after a disagreement with the majority owner about what appeared to be attempts to force the chain into insolvency.

The enforced collapse of a retailer employing more than 10,000 people would be of huge political interest, even without the prime minister’s personal connection to it. Absent a last-gasp rescue deal, the sound of investigators sharpening their pencils is getting ever-louder.

All eyes on JPMorgan after Healey’s bank tax raid

So now they know. After weeks of speculation about whether, and by how much, John Healey would increase taxes on Britain’s banks, the answer came yesterday in a few quick Budget sentences.

“Our world-leading banks make a huge contribution to this country, in the tax they pay, in the jobs, industry and investment they support,” he said.

“As Chancellor, I want to say directly to our banks, I celebrate and am grateful for the role you play. And amid global economic storms, I am looking to our banks to help fund breathing space for British families.”

No sooner had Healey’s intentions emerged – a tax hike, yes, but not as bad as feared, and no one-off windfall levy – than the share prices of Britain’s banks began to rally. Barclays bounced by 3.5 per cent and Lloyds Banking Group by more than four per cent.

The rises were disproportionate, even in the context of the most pessimistic industry fears. And as I wrote in this column at the beginning of last month, the prospect of a tax hike was already baked into the investment case for the biggest London-listed lenders.

To that extent, the most intriguing response to Healey’s hike may well have come from JPMorgan Chase, which I reported yesterday faces an extra UK tax bill of over £100m. A one-year hike on that scale for a bank the size of JPMorgan should not be nearly enough to deflect it from its well-progressed plan to build a new 3 million square foot Canary Wharf headquarters.

Nevertheless, JPMorgan’s response that the latest UK tax hike “lacks principle” and “overlooks that the banking industry operates in a highly competitive global marketplace” suggests there might yet be a sting in the tail.

Top of the government’s shopping list? A UK map

I know the Treasury is supposed to hold the purse-strings of government tightly, but can someone please buy the chancellor of the exchequer a map of Britain?

Delivering his Budget speech yesterday, John Healey confirmed my report that the government’s next international investment summit will take place next spring in Gateshead.

He might need to clarify that, though. The accompanying Treasury documents said the event will actually take place in…Newcastle.

The geographical confusion is a little concerning given this government’s obsession with growth in every postcode. Nevertheless, after Healey’s boss opted to cancel the investment summit which had been earmarked by Sir Keir Starmer to take place in London in December, it’s a step in the right direction that a replacement date is now being finalised.

I’ve expressed scepticism before about the wisdom of holding such an event outside London, given the constellation of global investors and company bosses that it hopes to lure. Manchester would have been a mistake, for all the obvious reasons connected to the PM.

I understand from officials at the Department for Business, Innovation, Science and Trade that – take your pick – Newcastle/Gateshead will have been particularly well-received by Varun Chandra, Andy Burnham’s chief business advisor, who grew up in South Shields. The task now is to get bosses to show up, and deals done.