GUS to sell finance arm for pounds 1.2bn
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.GREAT UNIVERSAL STORES, the mail order giant, has put its finance arm up for sale in a move which isexpected to raise in excess of pounds 1.2bn for the company.
GUS, which won a pounds 1.9bn takeover battle for Argos earlier this year, appointed Merrill Lynch to sell the division last week. A sales memorandum has already been circulated to interested parties.
The decision to sell the finance arm follows approaches from at least two companies interested in buying the business. GUS is expected to announce a preferred bidder by the end of the year.
The main business of the finance arm is its car finance operation, General Guarantee for Finance, which distributes through motor dealers and its own chain of 55 branches.
The finance division also includes a car leasing, a general insurance business and a contract hire operation, bought in February last year, which has a fleet of 17,000 hire cars. Analysts expect the business to fetch pounds 1.25bn, giving a sizeable boost to GUS's acquisitions fund.
It will also allow the company to strengthen its balance sheet after a string of acquisitions, which it paid for in cash.
The move runs against a growing trend among retailers to step up their presence in financial services. But GUS will present the move as an opportunity to sharpen the company's focus and dispose of non-core assets. Lord Wolfson, chairman of GUS, has been seeking to move away from lower-growth assets such as finance and property to higher-growth business such as database services.
Since 1996, when Lord Wolfson came on board, GUS has spent pounds 4bn on acquisitions. More than pounds 2bn of that has been used to expand into information services.
The company has also backed away from non-core business, divesting its property portfolio into a joint venture with British Land.
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments