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Matalan Founder John Hargreaves "concerned" by sale deal

Tom Shearsmith
16 January 2023

Matalan has been acquired by a group of investors including Invesco, Man GLG, Tresidor and Napier Park. However, Matalan Founder John Hargreaves has expressed "concern" about the deal.

The value retail chain had been looking for a £350m credit bail out. The deal reached will include a "significant reduction" in gross debt from £593m to £336m, a "day one" reduction of £257m.

Previous reports suggested that at least two other parties were interested in the running the business, which included a 50-50 bid led by Hargreaves, joined by Elliott Advisors, and a joint bid between Alteri and OpCapita.

A spokesperson for the Hargreaves Family Private Office said: "John Hargreaves and the Hargreaves family are disappointed by today’s announcement by Matalan. From the day he founded the company in 1985 through to the current sales process, John’s focus and commitment has been to act in the best interests of the company, its employees, suppliers and business partners.

"The Hargreaves family and Elliott bid would have left Matalan with less than £200m of debt and ultimately ensured it was best positioned for long-term success. John Hargreaves does not believe that the deal announced today with the first lien investors is an optimal outcome for Matalan and its key stakeholders.

"In particular, he is concerned that it fails to address the needs of the business to adequately deleverage its balance sheet and secure an appropriate long-term owner for the company, both of which were central to the Hargreaves family led bid."

Investors Invesco commented: "Invesco has been an investor in Matalan for over ten years and is excited about the prospects for the business. Having been one of the investors who supported Matalan with additional financing during the coronavirus pandemic, Invesco is now pleased to play its role in this transaction by ensuring that the debt burden carried by the group will be very substantially reduced."

Stephen Hill, Chief Financial Officer of Matalan, concluded: "As we transition to new ownership and having worked with John and the Hargreaves family for over 20 years, it would be remiss not to emphasise the contribution they have made to building the great business we have today and the many opportunities that lie ahead. On behalf of the Matalan team, I would like to express our sincere thanks and appreciation.

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