GUS planning to float Experian

RETAIL group GUS is exploring whether its Experian credit checking business should be cut loose next year, as it continues the corporate restructuring that began with the float of Burberry in 2002.

The firm will announce at next week's annual results that plans to spin off its South African retail arm are already well advanced.

UBS Warburg has been appointed to advise on the £250m South African float, the Daily Mail has revealed. It looks likely to take place during the summer.

Once the float is complete, the way is clear for GUS to split off Experian. This would leave it owning Argos and Homebase and focused purely on UK retail.

Analysts reckon Experian would be more highly valued by investors if it traded on its own as a financial services group.

If GUS decided to float it on the UK stock market, Experian would probably be valued at about £4bn. This means it would have a place in the FTSE 100 index along with GUS, which is valued at £7.8bn.

Burberry, which GUS floated in July 2002, is also close to joining the top 100, as its market value has swollen to £1.8bn.

Deutsche Bank expects GUS to announce a 28% increase in profits before goodwill and exceptionals to £822m for the year to March 2004. It says sales will rise 2.4% to £7.3bn.

This puts the shares (up 15p to 780 1/2p) on less than 13 times earnings. It looks cheap considering the value that could be extracted from a break-up and GUS's strong management record.

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