GUS split funds Experian growth
GUS today officially launched plans to split itself into two separately quoted FTSE 100 companies - Argos Retail Group and Experian, its fast-growing credit-checking division.
The long-awaited move, expected to take place towards the end of September, will see Experian raise up to £1bn to fund its rapid expansion.
GUS chief executive John Peace will become chairman of Experian while Oliver Stocken, the former Barclays finance director who also sits on the board at GUS, 3i and Standard Chartered, will chair Argos.
Both companies will be listed on the London Stock Exchange despite speculation that Experian, with its large US operations, might launch its shares on Wall Street.
As previously indicated, current chairman Sir Victor Blank is quitting the group to focus on his chairmanship of Lloyds TSB, which starts in May.
While it is too early to get a clear view of the valuation of the two sides of the business, Experian is likely to be worth about £7bn before £2bn of debt while Argos could be valued at about £3.6bn.
Advisers UBS and Merrill Lynch will now start working on details of how shares in the business will be split and the exact format of the Experian fund-raising. The team today stressed that the deal would be designed so no shareholders - retail or institutional - would be discriminated against.
Those comments were taken as meaning retail investors would be granted access to any additional share offer from the Experian side of the business.
The demerger will see the completion of GUS's plan, launched in 2000, to focus on its diverse individual businesses. Since that time it has spun off Burberry, sold its home shopping operations and bought the Homebase DIY chain.
While the Experian business is the fastest-growing, Argos Retail - which also includes Homebase - is seen as one of the smartest operators in extremely tough market conditions. Homebase has staved off some of the recession in the home improvements industry by recognising early the need to attract women into its stores, while Argos has dramatically increased the product ranges in its catalogues to keep sales moving in the right direction.
Argos Retail will continue to be run by chief executive Terry Duddy and finance director Richard Ashton. Experian will be headed by current divisional chief executive Don Robert and finance director Paul Brooks. The duo are widely expected to face takeover approaches within months of the flotation.
GUS has already rejected a £7bn approach for the division from venture capitalists Thomas H Lee and Bain. Some analysts today questioned whether venture-capitalist bidders would wait until the demerger before launching more-serious, higher offers.
Most watched Money videos
- Introducing Britain's new sports car: The electric buggy Callum Skye
- New Volkswagen Passat launch: 150 hp mild-hybrid starting at £38,490
- 'Now even better': Nissan Qashqai gets a facelift for 2024 version
- Mercedes has finally unveiled its new electric G-Class
- Mini celebrates the release of brand new all-electric car Mini Aceman
- A look inside the new Ineos Quartermaster off-road pickup truck
- Top Gear takes Jamiroquai's lead singer's Lamborghini for a spin
- Mini Cooper SE: The British icon gets an all-electric makeover
- Incredibly rare MG Metro 6R4 rally car sells for a record £425,500
- Porsche 'refreshed' 911 is the first to feature hybrid power
- Leapmotor T03 is set to become Britain's cheapest EV from 2025
- Kia's 372-mile compact electric SUV - and it could costs under £30k
- This is Royal Mail's last chance, says posties' trade...
- So which is cheapest for a three-month sabbatical in...
- ALEX BRUMMER: What you can learn from MY investing...
- Chinese firm Hikvision doubles CCTV sales in Britain
- Blow to City as £24bn Ashtead 'explores switch to Wall...
- General Election delays Marks & Spencer flagship store again
- Obituary: Nick Reilly - car industry legend who gave up...
- CITY WHISPERS: De Beers hangs on to the artworks in Anglo...
- Five reasons to steer clear of Tesla shares: Though it's...
- The bold moves you can make NOW to keep your pension out...
- Capita to announce new tie-up with Amazon Web Services to...
- Stock Exchange's boss JULIA HOGGETT admits she is privileged
- New hope on three continents after leaders elected in...
- HAMISH MCRAE: Never mind the Election - cut interest rates!
- Scrap share tax, says Abrdn boss: Investors DO back UK...
- British Fashion Council warns Shein's planned £50bn float...
- Stop the £40bn bank interest racket: Calls from across...
- ALLIANCE TRUST: The 'dividend hero' that's poised to...