John Hargreaves, chairman of Matalan, has made an informal offer of £817m for the retailer following a boardroom battle at the discount chain he founded two decades ago.

The indicative bid will be seen as a victory for independent board members who have pushed the 62-year-old chairman to come out into the open with a takeover offer after concerns that his tactics were undermining the value of the company.

The boardroom rift comes as tensions rise at other family-owned retailers, where profits have come under pressure amid weak consumer demand and intense competition.

The preliminary offer of 200p-per-share represents the minimum price the board was willing to consider and opens the door to talks which could lead to an agreed deal with the 62-year-old chairman, who with his family controls 53 per cent of the company.

Mr Hargreaves hand was forced this summer when non-executive directors disclosed his plans to launch a leveraged buy out in a boardroom revolt that was prompted by concerns his tactics would drive down the share price.

However, the chairman has struggled to get backing for a full-priced offer from Barclays Capital, which is providing leveraged financing for the deal.

The chairman's advisers tried to kick off negotiations at a lower price but were rebuffed by a special committee set up to safeguard the interests of minority shareholders.

The board said it was in the interests of shareholders that the £817m approach be considered and agreed to give the chairman more time to assemble a formal offer.

At the request of the company, the Takeover Panel said it would extend its deadline by one month to October 11 for Mr Hargreaves to "put up or shut up."

Mr Hargreaves skills as a retailer have been widely praised and there is support on the board for his plans to take the retailer private if terms can be agreed.

The chairman has also lined up Alistair McGeorge, former head of discount chain Littlewoods, to become his chief executive.

The pair have submitted a detailed operational plan to Barclays Capital with advice from PwC, but concerns persist that the chain will struggle to compete with rivals such as Primark.

Shares were trading below the indicative offer at 174p amid investor fears that talks about a 200p-per-share offer would break down or that Mr Hargreaves might try to lower his bid at the last minute.

The chain has been beset by trouble at the top and in January announced the surprise departure of John King as chief executive, prompting the fourth search for an executive in in five years.