Matalan founder John Hargreaves has had talks with three venture capital groups about a 220p a share buyout valuing the discount clothing chain at £903 million. Hargreaves, who controls 53 per cent, is believed to have insisted any bid should be above 300p. However his expectations will have been lowered as trading at Matalan has steadily worsened. Shares closed at 190p on Friday.

Last week Angus Monroe was linked with a possible bid for Matalan after he was ousted from his position at Instore. Asda has also been touted as a possible bidder.