MATALAN, the Skelmersdale-based discount clothing retailer, has drawn interest from at least five major buy-out firms in the opening stages of a £1.5bn auction, it was claimed today.

Private equity buyers TPG, Blackstone, Warburg Pincus, BC Partners and Advent International are reported to have submitted initial bids for the company, founded by John Hargreaves, 65, the son of a Liverpool docker.

He and his family own 100% of Matalan after taking the firm private in an £827m deal three years ago.

Any sale would net hundreds of millions of pounds in profits for the Hargreaves family.

Boston-based Advent International owns discount retailer Poundland and includes former Boots head Richard Baker as an operating partner.

Matalan has shown resilience in the recession as its cut-price clothes and homewares attract cost- conscious customers.

The group’s operating profits reached £102m in the year to February 28 – up from £89.4m a year earlier – while like-for-like sales rose by 8.2% in the first 14 weeks of the new financial year.

The deadline for first round bids was Tuesday and the board met to consider the offers yesterday.

Any deal is likely to be completed in the new year when would-be buyers have had the chance to examine Christmas trading figures.

Matalan said: “Discussions are ongoing. No further announcement is expected until the new year.”