Matalan founder may bid for firm

Matalan has seen profits fall sharply

Matalan has confirmed that its founder John Hargreaves is working on a possible plan to take the firm private.

Mr Hargreaves, who is also chairman of the discount clothing retailer, could make a bid as early as Monday, according to some reports.

Analysts say he could offer as much as 220p per share, which would value the firm at more than £900m.

Matalan, which has seen annual profits fall 55%, also said Mr Hargreaves was in dispute with fellow board members.

It said he objected to the board's proposed 6p a share annual dividend, saying it was too high.

Matalan added that he would not oppose the payment this year, but would not support a future dividend at a similar level.

Increased competition

Mr Hargreaves founded Lancashire-based Matalan in 1985, and continues to own 53% of the firm's shares.

In recent years it has suffered from increased competition in the cut-price clothing sector from supermarkets and its share price has more than halved since 2002.

It has warned that its current financial year is also likely to be challenging.

The firm is holding its annual general meeting on Wednesday.