Hargreaves agrees eleventh hour deal for Matalan
12 October 2006 09:26
After months of argument and speculation, Matalan chairman John Hargreaves has finally made a bid to buy out the remaining 47% of the company he founded. Mr Hargreaves reportedly worked through the night to put together the 200 pence per share offer, worth £817.2 million altogether, by the deadline of noon on October 11th. At one minute past twelve the London Stock Exchange made the public announcement that Matalan had agreed a deal with Missouri Bidco, the company formed by Mr Hargreaves for the purposes of completing the acquisition. The statement also confirmed that Mr Hargreaves had the financial backing of Icelandic bank Kaupthing after press reports that previous sponsor Barclays Capital had pulled out at the last minute.
In a statement, Mr Hargreaves said: "I am pleased we have come to an agreement to acquire the remaining shares in Matalan and that we have a full recommendation from the independent directors. The offer of 200 pence is full and fair and I would urge shareholders to accept the proposal. The company's recent difficulties have led me to believe that Matalan would be better off back in the private ownership of the Hargreaves family. This will enable us to make the necessary changes to the business and restore the original values and ethos that enabled the company to grow."
The deal still needs to be approved both at an EGM and in the courts but with the Matalan board’s support and the fact that the offer represents a 20.8% premium on each share, there is unlikely to be a hitch.
Commenting on the acquisition, Geoff Brady, senior independent director of Matalan, said: "The independent directors of Matalan have considered this offer from John Hargreaves very carefully. We believe that this offer provides Matalan shareholders with an opportunity to realise the value of their investment in cash at a price that fairly reflects the future prospects for the company."
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