FT: PE Firms Vie for Matalan

LONDON (Reuters) – Five major private equity groups are among the first-round bidders for discount retailer Matalan, which is being auctioned with an estimated price tag of about 1.5 billion pounds ($2.50 billion).

TPG, Blackstone (BX.N), Warburg Pincus and BC Partners have submitted indicative bids for the privately-owned Matalan, which has shown resilience in the global economic downturn as consumers became more price conscious, the Financial Times reported.

Advent International, whose investments include British budget store chain Poundland and German fashion retailer Takko, has also bid. If successful, Richard Baker, the former head of Boots and an operating partner at Advent, could be a contender for the chief executive position.

Matalan founder John Hargreaves owns the company with his family and could gain hundreds of millions of pounds if a sale went through. Hargreaves took the chain private in an 817 million pound deal in 2006.

If Matalan sells for 1.5 billion pounds, that would value the company at more than 10 times earnings before interest, tax, depreciation and amortisation of 145 million pounds in the year to Feb. 28.

The board met to discuss the initial offers on Thursday.

“Discussions are ongoing and no further announcement is expected until the new year,” Matalan told the Financial Times.

Matalan could not be reached immediately for comment. (Reporting by Sharon Lindores; Editing by Bernard Orr) ($1=.6002 Pound)