Private equity giants enter first stage fight for Matalan

MATALAN, the discount clothing chain, is believed to have entered the first stage of its sale process as five private-equity titans go head to head in the preliminary bidding process.<br /><br />TPG, Blackstone, Warburg Pincus and BC Partners are all understood to have entered the first round of bidding for the retailer, which has so far defied the downturn due to the appeal of its cheap goods.<br /><br />Advent International, where ex-Boots boss Richard Baker was recently hired as an operating partner, is the latest name to be added to the string of private equity firms thought to be interested in the retailer. <br /><br />Matalan was put on the chopping block by founder John Hargreaves last month. Analysts predict that a sale would fetch around &pound;1.5bn.<br /><br />A successful sale would net Hargreaves a huge windfall on his investment after he took the retailer private in a &pound;827m deal in 2006, following a period of underperformance on the stock market.<br /><br />Matalan recently said its earnings jumped 6.3 per cent in the year to 28 February to &pound;145.1m. Low cost retailers have enjoyed a boom in trade during the recession as cash-strapped shoppers trade down.<br /><br />Matalan has 203 shops across the country and recently began an expansion programme in the Middle East through franchise partners.<br />