Magazine article American Banker

Experian Spinoff Finally Confirmed, but No Timetable

Magazine article American Banker

Experian Spinoff Finally Confirmed, but No Timetable

Article excerpt

GUS PLC of London fulfilled expectations Wednesday in announcing that it would spin off the credit bureau Experian Information Solutions Inc. but disappointed analysts by not providing details on the timing.

"There is no strategic logic in maintaining the Argos Retail Group, Experian, and Burberry within the same group in the long term," Victor Blank, GUS' chairman, said in a press release.

David Tyler, its finance director, said on a conference call that the spinoff would not happen this year. GUS, whose retail businesses have been hit by a slowdown in consumer spending, wants to "avoid disruption," he said.

In an interview, Peg Smith, an executive vice president at Experian, said, "GUS is a set of businesses. There is some interdependence between them. ... You need to understand what exposure you leave behind" if the Costa Mesa, Calif., unit is spun off.

"The retail market is tough right now in the U.K.," Ms. Smith said. "It doesn't make sense to disturb the structure of the group further than they have today."

GUS has "made a firm commitment" to continue investing "heavily" in Experian in the interim, she said. As long as that investment occurs, "there's no need to accelerate the time line."

Frederick Searby, an analyst at JPMorgan Chase & Co., said GUS and Experian are probably waiting until after Sept. 1, when the Fair and Accurate Credit Transactions Act takes effect in all 50 states.

"No one ever knows what kind of an effect this type of legislation is going to have," he said. "They're waiting for the dust to settle. ... There are some uncertainties they're trying to get past."

GUS also announced Wednesday that it would spin off the luxury goods retailer Burberry Group PLC this year.

Analysts were dissatisfied with the open-ended plan for Experian.

"We might have hoped for" a timetable, said Richard Ratner of Seymour Pierce Group PLC in London. …

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