Elliott in talks with Matalan founder over takeover bid

Elliott Advisors has reportedly entered talks with John Hargreaves, the founder of Matalan, regarding his bid to buy back the business, according to Sky News. 

The investment firm is said to be discussing potential plans to help fund his offer, as the group undergoes a sales process while facing “hundreds of millions of pounds of debt”.

The move to seek a buyer comes ahead of a January deadline for the retailer to refinance £350m in secured debt, while a further £130m instrument is scheduled for repayment a year later. 

According to Sky, if the discussions result in a successful offer, Matalan would be added to the portfolio of British companies already backed by Elliott, which also owns stakes in housebuilder Avant Homes, Travelport and the bookseller Foyles. It has also held stakes in Hammerson and pharmaceuticals giant GSK.

Sky said it was “unclear” what valuation any sale process would achieve against the current economic backdrop however.

Matalan confirmed that a strategic sales process was underway last month, alongside an announcement that Hargreaves would step down as chairman after briefly returning to the business.

At the time, 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. I am delighted to welcome Nigel Oddy as the business’ new CEO and am confident Matalan is in good hands.”

Elliott and Matalan declined to comment.