The non-executive directors of Matalan will this week challenge John Hargreaves, the discount retailer's chairman, to give firm details of the offer for the company he has indicated he is considering.
Mr Hargreaves has spent the weekend consulting his advisers over whether to proceed with a bid, following an announcement on Friday by the Matalan board. The company shocked investors by warning that Mr Hargreaves, who owns 53 per cent of Matalan, had indicated he was unhappy with the company's dividend policy.
In a statement, Matalan said that while Mr Hargreaves had agreed not to vote against this year's 6p dividend at the company's annual general meeting on Wednesday, he might block future payments. The company also said Mr Hargreaves had indicated he was working on a bid to buy the remaining 47 per cent of the company.
Matalan's board is now waiting to see whether a bid will materialise. Mr Hargreaves has reportedly been in talks over financing with Barclays Capital, but is thought to be unlikely to offer a deal that would represent a significant premium to the company's current valuation.
Sources close to the company stressed that Matalan's non-executive directors are ready to take Mr Hargreaves on.
With the exception of the senior independent director Robert Shrager, Matalan's non-executives have all been appointed in the past two years, and do not have long-standing relationships with the chairman. They include Lord Harris, the chairman of Carpetright, and Martin Reavley, the former finance director of Kesa Electricals.
"They are all relatively recent appointments and they have shown they are very willing to assert their independence," one source said.
The speculation surrounding the ownership of Matalan also makes it a certainty that the chief executive John King will remain at the company long enough to claim a controversial £561,000 bonus. Mr King announced in January that he would step down from his role, but has a clause in his contract entitling him to a bonus worth the equivalent of 12 months' remuneration if he stays with Matalan until the end of the year.
The bonus has been attacked as "unwarranted" by RREV, the corporate governance arm of the National Association of Pension Funds. But while Matalan has previously said it had two candidates in mind for the post, it is now likely to find it impossible to line up a replacement for Mr King before the end of the year.Reuse content