VCs circle Matalan in £1.5bn deal

PRIVATE equity firms are circling Lancashire discount retailer Matalan which could see the group bought in a £1.5bn deal.

The chain has reportedly hired PricewaterhouseCoopers to advise on a possible sale as CVC Capital Partners has emerged as one of the potential bidders.

According to reports, Matalan’s chief executive Alistair McGeorge is understood to have met a number of interested parties, although no bid has been tabled and talks are at a very early stage.

Matalan is majority owned by founder John Hargreaves, and a sale would net him hundreds of millions of pounds.

Former Liverpool market trader Mr Hargreaves took the business private in an £827m deal backed by £410m of debt three years ago.

Matalan’s operating profits reached £102m in the year to February 28, up from £89.4m a year earlier.

Mr Hargreaves opened the first Matalan store in Preston in 1985, taking inspiration from low-price, out of town retailers in the US. By 1995 there were 50 stores across the UK.

It recently signalled the start of an expansion drive after concluding there was “significant scope” for new stores in the UK.