GUS rejects deal approaches

The owner of retail chains Argos and Homebase said today it had spurned expressions of interest in both of its operating divisions.

GUS said it had received approaches in recent months for Argos Retail Group, which owns Homebase and Argos, and its Experian credit checking arm.

The company, which has a market value of £8.67bn, held a regular board meeting today and stuck by its decision to proceed with previously announced plans to separate the two arms in a demerger in October.

The news failed to excite investors as GUS shares were less than 1% higher.

Private equity groups are the most likely parties to be interested in the GUS businesses, with US giants Hellman & Friedman and Kohlberg Kravis Roberts among those linked in recent months.

Most of the speculation regarding GUS has focused on Experian, which has achieved rapid expansion through acquisitions and organic growth.

Since coming under the wing of GUS, Experian has struck deals such as the £273m acquisition of website PriceGrabber.com, which enables shoppers to compare retailers’ prices.

Nottingham and California-based Experian is best known for its credit checking service but also provides the software and systems to run all aspects of card and loan processing for a large number of providers in the UK.

Much of Experian’s business is generated in the United States and following the demerger Experian shares will be listed on the London Stock Exchange but report in US dollars.

Experian posted record profits in recent results from GUS and helped offset a decline in earnings from the retail business.

In today’s statement, GUS said it had received a “number of expressions of interest in each of Argos Retail Group and Experian in recent weeks”.

It added: “The board of GUS has considered the merits of these approaches and has reviewed the situation at its regular board meeting today.

“It has concluded that shareholder interests are better served by proceeding with the previously announced demerger of Argos Retail Group and Experian.”

The separation of ARG and Experian follows the demerger of luxury goods brand Burberry last year and the sale of South African retail business Lewis and Dutch home shopping firm Wehkamp.