Poundland is in talks for a takeover deal with bidders including Martin Property Group and TG Jones owner Modella.
Retail trade union Usdaw has said it is concerned the retailer could be moving closer to administration as owner Gordon Brothers continues with efforts to secure a sale of the business.
But it is understood that advisers are still hoping to strike a solvent deal, which would avoid administration.
Bally Auluk, Usdaw national officer, said the union has been told that offers linked to a potential management buyout “are being turned down”.
He said: “Sources within the company are telling me that a decision about the future of Poundland could be made as early as tomorrow and there are deep concerns that the business could go into administration, which would be a disaster for our members.”
It is understood that Irish real estate business Martin Property Group and Modella Capital, the owner of TG Jones and Hobbycraft, are among bidders still involved in the Poundland auction process.
There are also bidders who are interested in parts of the business, with advisers inviting them to potentially revise their approaches.
Poundstretcher owner Fortress and Lakeland owner Hilco Capital have also shown interest in the auction process.
Poundland management, including managing director Barry Williams, have aligned themselves with the Martin Property Group bid, suggesting it would be the preferred partner for any management buyout.
The potential sale comes after private equity firm Gordon Brothers only bought the business last June for £1.
Gordon Brothers, which has overseen a major restructuring of the business, hired corporate advisory firm Alvarez & Marsal (A&M) to find a buyer for the business.
Poundland shut more than 100 stores across the UK as part of its overhaul, aimed at turning around significant losses.
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