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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