Poundland’s bosses are filing a notice of intention to appoint administrators as a dispute over a rescue bid leaves the discount chain facing a possible break-up. The business employs 12,000 people across 600 stores in the UK and Ireland.

If approved by the High Court, the notice would give Poundland 10 days to secure a rescue deal. AlixPartners is understood to have been lined up as administrator, though the eventual outcome remains unresolved.

The immediate divide is between management, which favours keeping the retailer intact, and its US owner, Gordon Brothers. Irish firm Martin Property Group submitted a bid to buy Poundland as a going concern, but its offer is understood not to have met the owner’s expectations.

Gordon Brothers wants to recover a £30 million shareholder loan inherited through its acquisition. MPG’s offer is understood to have provided £5 million, with the remaining payment deferred.

Managing director Barry Williams said in a staff memo that Gordon Brothers had restricted access to funds used for day-to-day operations. He described the situation as “unexpected, unwanted and wholly avoidable” and argued that strong sales showed the recovery was taking hold.

Williams called MPG’s proposal a “fully funded, ready to go bid that would have kept the business intact and able to continue the remarkable progress we've made”. Three independent directors appointed earlier this month to oversee a sale resigned immediately after disagreeing with Gordon Brothers’ decision not to accept MPG’s solvent offer.

A Gordon Brothers insider argued that breaking up Poundland would recover more money for creditors and ultimately offer the best outcome for staff, who might find employment with new store owners. That is a proposed outcome, not a guarantee of continued employment.

A sale through a pre-pack administration remains possible, but a break-up and sales of groups of stores are understood to be more likely. Poundstretcher owner Fortress is said to be interested in 200–250 stores; another large retailer is understood to be considering more than 100 sites. More than half a dozen retailers, including Iceland, Lidl and B&M, have expressed interest.

Gordon Brothers previously said attention must turn to other active bids, which would be evaluated objectively to minimise uncertainty for staff and other stakeholders.

The owner bought the struggling chain from Polish retail group Pepco for a nominal £1 in June last year, putting it up for sale a little over a year later. Founded in Burton-upon-Trent in 1990, Poundland serves around 20 million customers annually, selling low-cost everyday goods, general merchandise and fashion.