A recent survey of UK consumers claims 70 per cent of people who split from their partner enjoy a better lifestyle as a result. Odd then, that GUS’s plans to complete its demerger were met with a 3.3 per cent fall in the retail and services conglomerate’s share price on Tuesday.

The finer points of the proposal have irked some. Experian, the database arm which accounts for more than half of GUS’s value, will list in London, rather than New York, where it might have gained a higher rating. Taking on the bulk of GUS’s net debt will require selling new shares equivalent to 10-15 per cent of the new entity’s equity. The drawbacks of a US listing for Experian, however, would have been increased compliance costs and flowback. Extra equity to fund Experian’s good growth prospects should not incur too big a discount, although the high price paid for PriceGrabber.com last December understandably raises concerns.

Argos, the retail arm, is battling in a tough environment. That said, once demerged, it could potentially exit the struggling Homebase DIY business. With pro-forma net debt to earnings before interest, tax, depreciation and amortisation of 3 times, Argos makes a tempting target for private equity buyers. Experian, of course, has already reportedly attracted interest from this quarter. Using reasonable multiples of 15 and 20 times earnings for Argos and Experian, respectively, and adjusting for increased overheads, GUS is worth £11.80 a share – 10 per cent above the current share price. Worries about the prospects for overstretched US and UK consumers, as well as question marks over Experian’s capital increase, explain that gap. But the potential also exists for higher valuations, particularly for Experian. As the divorce date nears, the benefits of breaking up should become clearer.

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