GUS, the retailing conglomerate, set an indicative price range of 475p to 610p for the £800 million of new Experian shares it is selling as part of the £5 billion plus demerger of its financial services arm later next month.
At the same time, GUS changed the name of its Argos and Homebase catalogue shopping and DIY division to Home Retail Group (HRG) ahead of its own demerger, and updated the stock market on recent trading for both units.
GUS is selling £600 million of new Experian shares to existing owners and a further £200 million to fresh investors. Merrill Lynch and UBS, advisers to GUS and joint bookrunners for Experian, and JP Morgan Cazenove, as joint lead manager for the share sale, will spend the next three weeks on marketing roadshows.
Experian and HRG should both be catapulted straight into the FTSE 100 once they gain their separate listings. At the midpoint of today’s range, Experian will be valued at about £5.5 billion, although it has debt of a further £1 billion.
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HRG, which is not raising any new capital, is expected to be worth between £3 billion and £4 billion.
The demergers are expected to complete on October 10, with trading in the new shares pencilled in for the following day.
David Tyler, GUS’s finance director, said a wide range had been set for the new shares as an insurance policy against sharp falls on the stock market. Setting a wide spread for Experian shares follows similar moves by floating companies Hogg Robinson, the business travel group, and Aer Lingus, the Irish airline.
The indicative pricing came as GUS said sales at Experian rose by 18 per cent year-on-year during the five months to the end of August.
Although this appears to indicate a slowing compared with the 23 per cent sales growth reported for the first three months of that period, GUS said the numbers were in line with its expectations and that it was very happy with performance.
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At HRG, sales of flat panel TVs and set-top boxes during the World Cup helped boost underlying sales at Argos by 5 per cent, but the poor-performing home improvement market saw Homebase sales fall by a comparable 3 per cent.
Shares in GUS shed 19p to 978p, valuing the pre-demerger GUS at £8.8 billion. For more on the shares click here