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Lenders ‘set £210m asking price’ for discount retailer Matalan

Lenders to Liverpool-based out-of-town discount retailer, Matalan, have reportedly set a £210m asking price for the business, and are prepared to take control of the group if the price is not met.

Last Friday (October 21) was the deadline for bids to be submitted for the Knowsley retailer after it announced it was on the market last month.

Executive chairman and founder of the group, John Hargreaves, stepped down at the time of the announcement to enable him to make his own bid to win back control of Matalan.

Earlier this month investment firm, Elliott Advisers, which owns Waterstones, was said to be backing Mr Hargreaves in his bid.

The lenders are owed £350m, which was scheduled for repayment next January, but last week it was announced they had agreed to a six month extension while the sale process proceeds.

It is now reported, by The Telegraph, that they have set a £210m minimum price for Matalan, and are “prepared to take control of the company if rescue bids do not meet expectations”.

Bidders had a 12 noon deadline last Friday to submit their non-binding proposals, although it is understood this was extended to allow interested parties to finalise offers.

Potential investors include Mr Hargreaves and Elliott Advisers, while Sir Michael Hintze’s CQS and Napier Park are reportedly among a separate group of hedge funds that want to take control of the company. US investor, Flacks Group, has also made a bid for Matalan, its chairman said.

London-based Alteri Investors and Sports Direct founder, Mike Ashley, have also been linked with a possible bid.

At the end of the second quarter period last month, 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.