John Hargreaves, the chairman of Matalan, has been granted an extra month to come up with a potential £817m offer for the 47 per cent of the discount clothing retailer his family does not already control.
The company's founder, who held a gun to the board when he threatened to withdraw his family's support for the dividend, held out the possibility of making a 200p-per-share bid for the retailer - the minimum its independent directors are thought to be prepared to accept.
But he asked for more time to prepare a firm offer. It is thought that he wanted the extension to see how well the company trades in September, a key month for determining the strength of its autumn ranges. Should they disappoint, Mr Hargreaves "reserves the right to make an offer at a price of less than 200p per share", according to a statement from the company, "provided that such an offer is recommended by the independent committee".
Shares in Matalan closed flat at 172.25p yesterday after earlier rising to 180p, reflecting City scepticism about the outcome of the bid talks.
The Takeover Panel had said Mr Hargreaves, who has lined up financing from Barclays Capital, had only until noon on 12 September to launch a bid.
The retailer said its independent directors "believe it is in the best interests of Matalan shareholders, to allow Mr Hargreaves further time to work on a possible offer for Matalan to work on a possible offer of 200p per share in cash".
Matalan's second biggest shareholder has indicated it would not be prepared to support a bid at even 200p per share. Harris Associates, which is run by the veteran fund manager David Herro, believes the retailer is worth 300p per share but has said he would accept something in between the two figures.Reuse content