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Insurance News - Sunday 7th March 2010

Matalan founder looking to refinance the company

Matalan founder looking to refinance the company

John Hargreaves, the founder of discount clothing store Matalan, is rumoured to be looking at a potential refinancing of the company which could see him pocket a £250 million special dividend. The company has been for sale for some time although potential buyers refused to match the £1.5 billion price tag and the sale was pulled some weeks ago. However it is believed that the company is looking towards a potential £500 million plus refinancing which would refinance existing debt and also allow the company to pay a special dividend to John Hargreaves.

Discussions regarding the potential refinancing appear to be at a very early stage and there is some concern that demand for so-called "junk bond" issues such as the Manchester United refinancing has weakened over the last few weeks. This refinancing is likely to be over a six year period with many people believing the company will be sold sooner rather than later, once the economy improves, investor appetite returns and buyers are prepared to meet the £1.5 billion asking price.

John Hargreaves has proven very adept at going against the trend in investment markets and indeed either way he will pocket a very significant return on his investment when he took Matalan private a few years ago.

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