// Elliott Advisors has entered talks with Matalan’s founder about helping to fund an offer to buy the business
// If the discussions result in a successful offer, it would add Matalan to a portfolio of British companies backed by Elliott
Matalan founder John Hargreaves has entered talks with investment firm Elliott Advisors about financing his bid for the retailer, according to Sky News.
The discount retailer is weighed down by hundreds of millions of pounds of debt and now faces a deadline in January to refinance £350m in debt, with Hargreaves previously eyeing a sale of the company.
It also took a £60m loan from Bantry Bay – in which Elliott owns a stake – as it sought to strengthen its balance sheet ahead of what threatens to be a prolonged slump in consumer sentiment.
If the discussions result in a successful offer, it would add Matalan to a portfolio of British companies backed by Elliott, which has become one of the world’s most prominent activist investors, owning stakes in businesses including Waterstones, Travelport and Foyles.
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It remains unclear what valuation any sale process would generate in the current challenging economic conditions.
However, Hargreaves could face competition from Mike Ashley, the Frasers Group founder, who is rumoured to be preparing his own offer for Matalan.
Matalan warned during the summer that its “ability to successfully refinance our debts involves geopolitical, economic and market factors outside the direct control of the business”.
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2 Comments. Leave new
If I was Hargreaves I would fight like a Kilkenny cat to avoid at all costs letting the Fraser group have anything to do with Matalan.
This would be the worst thing for him to do, this is business you must not make it personal