Is GUS Wise To Defy Impatience?

U.K. retailing giant GUS PLC has been slimming down its diverse operations to unlock value, but much too slow for impatient analysts. Their disappointment boiled over in May when the company announced plans to spin off its 66% stake in Burberry Group PLC and, while committing itself to divesting U.S.-based credit reporting giant Experian Inc., held off on a timetable. Analysts believe that Experian may be worth nearly half of the GUS breakup value and will fare well as an independent company. But GUS may be taking a wise tack in going slow. Neither the company nor the analysts commented on it but some industry observers note that the timing for an accelerated exit is not good because of a recent explosion of data thefts at financial institutions and information providers. Experian has not been cited as a source of stolen data, but observers say that GUS probably is smart to make sure that the company’s systems are as secure as possible and pose no legal backlash as a result of the ultimate split. One source notes that a premature divorce without safeguards “could be very dicey” for GUS. “They could be creating more problems than they are hoping to solve,” he says. (c) 2005 Mergers and Acquisitions Journal and SourceMedia, Inc. All Rights Reserved. http://www.majournal.com http://www.sourcemedia.com