Matalan surges after takeover rumours

Matalan saw its shares jump by up to 8 per cent this morning, following renewed rumours of a buyer.

The price dipped later to stabilise around the 242p mark by midday. The City is understood to have reacted to rumours that either Wal-Mart or Tesco is interested in buying the discounter. Any successful bid would have to win the support of chairman John Hargreaves, who retains a 52 per cent stake in the retailer.

Matalan's market capitalisation stands at just less than£1 billion.