According to a weekend report, Matalan founder John Hargreaves’ attempt to retake control of the financially troubled fashion and lifestyle store he founded in 1989 has failed.
The company’s lenders came to an agreement on a debt for stock swap, sealing his fate. This action—which had been anticipated—follows a selling process that started in the fall of last year but ended without any viable offers being submitted.
The Sunday Times stated that Matalan would now declare that lenders Invesco, Man GLG, Tresidor, and Napier Park had taken control of the UK retailer “early Monday,” and our sources indicate that this is the case. The bankers, meanwhile, are reportedly also preparing to speak with rejected bidders about a potential minority interest in the company, according to the source.
The lenders agree to lower their financial liabilities by between £150 million and £200 million in exchange for assuming ownership, and they also promise to provide an additional £100 million in new equity. Overall, the agreement should result in a £260 million to £335 million decrease in Matalan’s gross debt.
They are attempting to select a new chairman and are said to have spoken with temporary chief executive Nigel Oddy about making his position permanent. The transaction ends Hargreaves’ bid to reclaim control of the company after he returned to it in July following a 15-year absence as executive chair.