Conglomerate simplifying business
The demerger of luxury brand Burberry from holding company GUS has taken place today.

Retail conglomerate GUS has shed the fashion arm, demerging its remaining 65 per cent stake in the group.

GUS will allocate the Burberry holding to its shareholders. For every 1,000 existing GUS shares held at 7.00am on today (December 13, 2005), they will receive 305 Burberry shares and 860 new GUS shares.

GUS chairman Sir Victor Blank said last month that the move would allow the group to consolidate its retail offer. He said: 'The demerger of our remaining stake in Burberry is another major step in focusing GUS on fewer activities. Distributing our stake to existing shareholders will enable them to participate directly in the exciting growth opportunities we see at Burberry.'

The demerger will enable the conglomerate to 'simplify the management of GUS, by substantially eliminating the need to deal with Burberry matters'. It will allow management to focus on catalogue business Argos and highly profitable consumer credit arm Experian.

Investec analyst Mark Charnock said of the split: 'There could be some profit-taking today now that the Burberry demerger is effective. However, with growing confidence that the next reorganisation step, the splitting of ARG and Experian, could take place within 18 months, we believe there should be further share price upside over that time horizon.'

Dealing of the new GUS shares began at 8am this morning.