Investment firm linked with Matalan founder’s bid to regain control
Investment firm, Elliott Advisers, which owns Waterstones, is reportedly backing John Hargreaves in his bid to win back control of out-of-town discount retailer Matalan.
Mr Hargreaves stepped down as executive chairman of the Knowsley-based business on September 26, to launch a bid to buy the business which had announced it had begun a sale process.
The business, which surpassed the £1bn revenues mark in the year to February 2022, must repay a £350m bond next January, while a further £130m instrument is scheduled for repayment a year later.
Mr Hargreaves, the son of a Liverpool docker, set up the business in 1985.
Sky News is reporting that he is being backed by Elliott in his bid to buy Matalan, although there are also reports that Frasers Group founder, Mike Ashley, is also planning a bid.
Elliott Advisors is believed to be in discussions with Mr Hargreaves about financing his offer.
If their bid is successful it means Matalan would join a portfolio of British companies backed by Elliott, including housebuilder Avant Homes, Travelport and the bookseller Foyles.
Elliott has also held stakes in public companies including pharmaceuticals giant GSK and Hammerson, the shopping centre owner.
Matalan employs more than 11,000 people and trades from 230 UK stores.
It also operates an e-commerce platform, together with more than 50 overseas franchise stores.
Matalan claims to have 11 million customers.
The business, like many other retailers, was hit by the pandemic, followed by the resultant supply chain challenges, and now the cost-of-living crisis, which is impacting the spending power of most shoppers.
Announcing his decision to step down as executive chair last month, Mr Hargreaves said: “Matalan is a business that has been in my DNA since the day I founded it in 1985.
“I am stepping down as chairman so that I can participate in the strategic sales process as a bidder. My focus and absolute commitment will remain to do what I believe is in the best interests of the company and all its stakeholders, in particular the 11,000 people we employ.
“My intention is to be instrumental in positioning the business for long term success.”
At the end of the second quarter period, Matalan had unrestricted cash on balance sheet of £101.6m, compared with £173m a year ago and £73.3m in 2020.
The group has developed a four-year business plan which estimates that it can increase its annual revenues from £1.199bn in fiscal year 2023, to £1.284bn in 2024, £1.381bn in 2025, and £1.444bn the following year.
