Speculation is mounting over when John Hargreaves, the founder of cut-price clothing retailer Matalan, would table a bid to take the company private and how much he would be prepared to pay for it.
Mr Hargreaves, who founded Matalan more than 20 years ago, is understood to have lined up Barclays Capital to back his bid, and could make an offer as early as today .
There was speculation at the weekend that he could offer as much as 220p per share, which would value the group at just over £900 million.
Other City analysts thought his offer would come in at only 170p to 180p per share, or possibly 190p.
The lower end of the estimate would give shareholders only a tiny premium on Friday's closing price of 169p.
The group, which is based in Skelmersdale in Lancashire, has seen its share price more than half from its peak of about 400p in 2002 as it has been hit by competition in the cut-price clothing sector from supermarkets, but it has been boosted recently by takeover speculation.
Matalan issued a statement after the stock market had closed on Friday revealing that its chairman was working on a possible takeover offer for the company.
It also indicated that Mr Hargreaves, whose family already owns 53 per cent of the group's shares, had fallen out with the rest of the board over its dividend payment.
Matalan said it had been told by Mr Hargreaves that the annual dividend of 6p a share, which is due to be proposed at the company's annual meeting on Wednesday, was too high when compared with other comparable UK quoted retailers.
Matalan added that Mr Hargreaves would not oppose the payment this year, but that his family would not support a future dividend at a similar level. It is a view that the rest of the Matalan board said it did not share.
Some commentators claimed that by opposing the dividend payment Mr Hargreaves was encouraging shareholders to sell their stock, which would push down the group's share price and enable him to pay less for the stake he does not already hold.
The UK Shareholders' Association, which is backed by 1,500 private investors, has condemned the move, saying it is not in the best interests of shareholders, according to the Sunday Telegraph.
Speculation over a potential move to take the company back into private ownership has been rife in the City for several months.
But it is thought that a boardroom rift could make it harder for Mr Hargreaves to agree a price that would secure the board's backing.
Matalan recently announced underlying profits of £56.7 million for the 12 months to February 25, compared with £80.5 million a year earlier, as like-for-like sales tumbled by 6.9 per cent in the face of a competitive trading environment.
It also warned it expected another challenging 12 months. ..SUPL: