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Blackstone and KKR target GUS units

Blackstone and KKR are understood to be pursuing an interest in two retail units owned by GUS, despite a recent announcement by the UK retail group to demerge the businesses.

US private equity firms The Blackstone Group and Kohlberg Kravis Roberts are teaming up to acquire high street retailers Argos and Homebase, despite parent company GUS’ recent commitment to demerging the businesses.

According to media reports, Blackstone and KKR have partnered to make a £4 billion (€5.8 billion) bid for the two divisions of UK retail group GUS.

A report on Reuters said that, if successful, Blackstone would acquire Argos, while KKR would buy Homebase. Blackstone and KKR were not available for comment.

GUS released a statement at the beginning of the month, rejecting “a number of expressions of interest in each of Argos Retail Group and Experian in recent months”. The group said that it would proceed with its previously announced strategy of demerging Argos Retails Group and Experian later this year.

Experian, a credit-checking business, is reported to have also attracted interest from private equity firms, including Bain Capital and Texas Pacific Group.

At 13.30pm GMT today, GUS shares were trading at 976 pence per share, up from a Friday closing price of 964 pence.

Recent first quarter results released by GUS show a mixed big for its retail outlets. Argos increased sales by 14 percent, while sales at Homebase decreased in the fourth months to 30 June 2006 were down by 1 percent.