Matalan founder Hargreaves tables last-ditch bid to retain control

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Matalan founder John Hargreaves has lodged a final offer for the clothing chain in a last-ditch bid to retain control of the business.

John Hargreaves

John Hargreaves has launched a joint bid for Matalan with Elliott Advisors

Hargreaves has joined forces with the private equity arm of Elliott Advisors on a 50-50 bid for the fashion retailer.

The 78-year-old’s rescue bid is one of four offers on the table. According to The Sunday Times, the other parties understood to have made firm offers are Matalan’s senior lenders and the turnaround firms Alteri and OpCapita.

The group of lenders that forced the sale process and is now bidding to take control of the chain includes Invesco, Tresidor Investment Management and Man GLG, part of FTSE 250 investment firm Man Group.

The lenders are thought to be in a strong position to ultimately seize control of Matalan.

Hargreaves, however, has not given up hope of retaining control. He hopes that his knowledge of the business – coupled with the fact that his family owns the company that provides Matalan’s IT platform – will swing the auction in his favour.

The offer lodged by Hargreaves and Elliott is understood to include a commitment to inject capital into Matalan.

Hargreaves opened the first Matalan store in Preston in 1985 and floated the business on the London Stock Exchange 13 years later.

He moved to Monaco in 2000 and sold a portion of his stake. Courts ruled that Hargreaves had to pay up to £135m in capital gains tax on the share sale.

Although it is lumbered with more than £500m of debt, Matalan has traded well since the coronavirus pandemic. It recorded an underlying profit of £100m last year, on sales of £1bn.

However, credit insurers, including Allianz Trade, have pulled their cover for suppliers to the retailer.

Matalan, which now employs 13,000 people across 230 stores, is thought to have told bidders it expects to turn an underlying profit of £30m in its current financial year, with earnings rising to £114m by 2026.

Sources close to the sale process suggested that a successful bidder will be selected in the coming weeks.