Hargreaves, who founded the chain in Preston in 1985, appointed Goldman Sachs and PricewaterhouseCoopers to explore a sale of the business in December after receiving unsolicited offers from private equity groups.
Buyout houses including CVC, TPG, Advent International and Warburg Pincus are believed to have been interested. It is unclear which groups tabled firm offers.
Yesterday, Matalan said it had terminated talks. A spokesperson said: “Matalan has closed down the potential sale process for the business.”
It is thought bidders baulked at Hargreaves’ price tag, while he decided the company was strong enough to go it alone. Last month, the firm reported positive Christmas trading from its 205 stores with like-for-like sales up 9.3 per cent over 13 weeks.
The company opened its first outlet in several years in 2009. It plans to roll out 10 more this year, with management said to have ambitious growth plans after a period of stagnation.
Hargreaves took Matalan private in 2006 in a £817m deal. He will now weigh up a refinancing package or a flotation, although he is understood to be wary of listing given Matalan’s past experiences as a public company.
The scotched sale contrasts with the £955m handed over by private equity firm KKR for Pets at Home in January. Hailed as marking the return of headline-grabbing buyout deals, KKR’s purchase was expected to kick-start a wave of M&A activity.
It is also an ill omen for clothing outfit New Look, which is trying to raise £650m through a public listing. The prospect of weaker consumer demand may deter some investors.