The controversial former owner of Comet, the defunct electricity network, is among suitors vying to gain control of Matalan, the Matalan retailer.
OpCapita, which is chaired by Henry Jackson, is expected to submit an indicative offer to buy Matalan before Friday’s bid deadline, Sky News has learned.
OpCapita sparked condemnation a decade ago when it briefly owned Comet, saw it collapse and then returned tens of millions of pounds, even as taxpayers were saddled with a £70m bill.
It has since expressed an interest in buying UK retailers including Homebase and Majestic Wines, although its only UK investment is The Football Pools.
His interest in Matalan pits rival investment firms, including Alteri, which is backed by Apollo Global Management, and John Hargreaves, Matalan’s founder, who is expected to be backed by activist investor Elliott Advisors.
Mike Ashleytycoon Frasers Group, is also reported to be preparing an offer for Matalan.
Matalan, founded by Mr Hargreaves in 1985, faces a £350m debt refinancing deadline next year.
It also took out a £60m loan from Bantry Bay, in which Elliott owns a stake, as it sought to shore up its balance sheet ahead of what threatens to be a prolonged downturn in consumer sentiment.
Based in Liverpool, Matalan employs more than 11,000 people and trades in 230 UK stores.
It also operates an e-commerce platform and has more than 50 franchise stores abroad.
The company claims to have 11 million customers.
Like many of its peers, the chain has felt its finances have been hit hard by the pandemic, prompting Monaco-based Mr Hargreaves to provide significant financial support.
Global inflationary pressures have squeezed margins in recent months, while supply chain issues have weighed on inventory availability.
Matalan warned over the summer that his “ability to successfully refinance our debt involves geopolitical, economic and market factors that are beyond the direct control of the business.”
Mr Hargreaves recently stepped down after a brief return as Matalan chairman to take part in the bidding process.
The Hargreaves are being advised by Lazard, while Teneo is handling the sale and Perella Weinberg Partners is advising the first lien or senior lenders.
OpCapita declined to comment.