Matalan explores a sale to private equity firms
DISCOUNT clothing and homeware retailer Matalan is being circled by several private equity firms interested in taking it over, it was confirmed by the company this weekend.
The retailer has appointed PricewaterhouseCoopers (PwC) to advise it after receiving a string of unsolicited approaches by firms, including CVC Capital Partners.
Matalan has been given a likely £1.5bn price-tag by retail analysts. It is believed a beauty parade will soon be held to decide on the merits of the firms. CVC yesterday declined to comment when contacted by City PM
But any discussions with firms remain at a preliminary stage. Chief executive Alistair McGeorge said yesterday there would be no deal until the new year.
Any sale of the business would mark the end of founder and chairman John Hargreave’s 24 years at the retailer.
Matalan recently said that its earnings jumped 6.3 per cent in the year to 28 February to £145.1m. Low cost retailers have enjoyed a boom in trade during the recession as cash-strapped shoppers trade down to cheaper options.
Matalan has 203 shops across the country and recently began an expansion programme in the Middle East through franchise partners.
MATALAN: A BRIEF HISTORY
John Hargreaves, the son of a Liverpool docker who later became a successful market trader, opened the first Matalan store in Preston in 1985 after being inspired by out-of-town, low price retailers in the US. By 1995, Matalan had expanded to 50 stores across the country. In 1996 Hargreaves gave up the chief executive seat to Angus Monro but remained as chairman. In 2000 Hargreaves and his family decided to place 45.4m shares on the market, reducing their stake in the company from 64 per cent to 52 per cent. In 2001 Monro resigned and Hargreaves stepped back into role of chairman and chief executive. Hargreaves took it private again three years ago in a £827m deal, backed by £410m debt, after the shares became the worst performing retail stock and brought in former Littlewoods boss Alistair McGeorge as chief executive.