The founder of the Matalan discount stores is set to net over £200m from the sale of a large part of his stake in the highly successful retail group.
John Hargreaves, 55, has been under pressure to reduce his stake in Matalan to improve liquidity in the shares, which have soared since the company's stock market flotation two years ago. As part of a share placement he will sell 45.4 million shares. With the shares closing down 12 per cent at 477.5p yesterday the sale would raise £216m.
Mr Hargreaves, Matalan's chairman, will see his family's stake in the business cut from over 60 per cent to 52 per cent. He will therefore remain the controlling shareholder in a business with a stock market value of just under £2bn.
Mr Hargreaves, who is a former market trader from Liverpool, founded Matalan in 1985 from a single store in Preston. It now has over 100 stores and has seen its shares rise eight fold in the last two years. Mr Hargreaves agreed not to sell any shares in the company within 18 months of the float.
Mr Hargreaves would not comment on how he would use the proceeds yesterday. However, he has said in the past that he has no interest in a "flash" lifestyle. "I've got no hobbies," he has said in the past. "This is my business."
Two other directors will also raise significant sums from share sales. Angus Monro, the chief executive, will sell 2.25 million shares in a hedge transaction over five years. Ian Smith, finance director, is selling two million shares via a similar means.
News of the disposals overshadowed another sparkling set of results from Matalan, whose low priced out-of-town stores have put pressure on many rival high street retailers. Following a change in year end, pre-tax profits for the 60 weeks to 26 February soared from £22.7m to £54.1m. Current trading is also strong with like-for-like sales in the first 10 weeks of the current year up by 31.2 per cent.
Investec Henderson Crosthwaite uprgraded its current-year profit forecast from £66m to £82m and said the shares were a "strong buy".