The feared investor which owns Waterstones is plotting to again the founding father of Matalan in his efforts to wrest again management of the low cost retailer.
Sky News has learnt that Elliott Advisors is in talks with John Hargreaves about serving to to fund a proposal to purchase the enterprise, which is weighed down by a whole lot of tens of millions of kilos in debt.
If the discussions end in a profitable provide, it will add Matalan to a portfolio of British firms backed by Elliott, which has turn into famend as one of many world’s most distinguished activist traders.
The agency owns stakes in companies together with Avant Homes, the housebuilder, Travelport and the bookseller Foyles.
It has additionally held stakes in public firms together with prescription drugs big GSK and Hammerson, the procuring centre proprietor, the place it has agitated for administration and strategic modifications.
Matalan, which was based by Mr Hargreaves in 1985, faces a deadline in January to refinance £350m in debt.
It additionally took a £60m mortgage from Bantry Bay – through which Elliott owns a stake – because it sought to strengthen its steadiness sheet forward of what threatens to be a protracted hunch in shopper sentiment.
Based in Liverpool, Matalan employs greater than 11,000 individuals and trades from 230 UK shops.
It additionally operates an e-commerce platform and has greater than 50 abroad franchise shops.
The firm claims to have 11 million prospects.
It was unclear this weekend what valuation any sale course of would obtain in opposition to the present financial backdrop.
Mike Ashley, the Frasers Group tycoon, can also be reported to be making ready a proposal for Matalan.
Like lots of its friends, the chain discovered its funds severely strained by the pandemic, prompting the Monaco-based Mr Hargreaves to offer substantial monetary help.
In current months, international inflationary pressures have impaired margins, whereas provide chain challenges have had an influence on inventory availability.
Matalan warned through the summer time that its “ability to successfully refinance our debts involves geopolitical, economic and market factors outside the direct control of the business”.
Mr Hargreaves lately stepped down after a quick return as Matalan’s chairman with the intention to take part within the bidding course of.
The Hargreaves household is being suggested by Lazard, whereas Teneo is dealing with the sale and Perella Weinberg Partners is advising the first-lien – or senior – lenders.
Elliott declined to remark.
Source: information.sky.com”