Orange County is out of the running for the corporate headquarters of an independent Experian Group when it goes public in coming months.
The question now is whether the credit reporting company’s chief executive stays here or follows other senior executives to London.
Experian’s parent company, British retailer GUS PLC, plans to “de-merge” the unit and put Experian’s headquarters in London either this year or early in 2007.
Today, Experian’s de facto headquarters is in Costa Mesa, where Chief Executive Don Robert and other top brass are based. Officially, Experian says it has dual headquarters in Costa Mesa and Nottingham, England.
But now GUS has left little doubt that Experian will call London home to coincide with its pending listing on the London Stock Exchange.
The decision puts to rest months of speculation about where an independent Experian would be based.
Down to Robert
But there’s still a big loose end,where Robert will end up.
The decision facing Robert: stay in sunny Costa Mesa, the heart of the company’s North American operation, or move to cloudier London, Experian’s new center of power.
“He’ll assess what’s best for him,” spokesman Rollo Head said.
Observers say Robert could go either way.
The details are worth haggling over.
If GUS had decided to put the headquarters in Costa Mesa, Experian instantly would have been among the biggest public companies in OC with an expected market value of around $13 billion.
An Experian U.S. public offering would have been among the biggest investors have seen in recent years.
Now London is set to grab any glory from Experian’s break from its parent. But losing the headquarters and keeping Robert still would be notable for OC.
In an interview last year, Robert said, “We’re very comfortable with managing the company almost in a virtual sense.”
Robert has spent many of his waking,and sleeping,hours flying around the world as Experian makes a big global push. That’s left little time for his hobbies of golf and wine collecting, he said.
If Robert were to stay in Costa Mesa, he stands to see more travel and long stints in London.
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Experian in Costa Mesa: about 1,200 local workers |
Case for London
But staying here may not be practical.
Experian’s chief financial officer, Paul Brooks, plans to move from Costa Mesa to London, along with other senior finance officials.
With a London address, Robert would be closer to British analysts and institutional investors who are set to become Experian’s dominant shareholders.
As part of the breakup, GUS shareholders are set to receive one share of Experian and one share of the company’s retailing arm. Experian also plans to offer new shares equal to about 15% of its ownership.
There are no plans for a U.S. exchange to trade depositary receipts for Experian, Head said.
North America is the biggest piece of Experian’s business,and the reason GUS’ overall revenue has weathered a downturn in British consumer spending. GUS also runs Homebase home improvement stores and general merchandiser Argos.
Experian Expansion
Experian has been expanding beyond Europe and North America to Brazil, Russia, India, China and South Korea. It recently opened a headquarters for its Asian operations in Hong Kong.
Also, Experian is buying companies as a way to move beyond its bread-and-butter credit operations. Last spring, the company paid $330 million for Santa Monica-based LowerMyBills.com, which directs users to deals on mortgage loans, auto loans and other expenses.
In December, Experian said it paid $500 million for Los Angeles-based PriceGrabber.com LLC, a comparison shopping Web site. It was the biggest buy for Experian since 1998.
Investors have clamored for Experian to break away from GUS’ sluggish retail group.
Early speculation had Experian possibly listing on Nasdaq via an initial public offering. But that might have proven too troublesome for GUS’ British investors.
“Our view has been that Experian’s value might have been best maximized through some form of U.S. listing,” said Mal Patel, an analyst with Merrill Lynch & Co. “But while the initial value certainly may have been high, UK shareholders would have found it difficult to retain their holdings.”
Others thought GUS might sell Experian to a private equity investor.
Last month, Boston private equity firms Thomas H. Lee Partners LP and Bain Capital LLC reportedly offered $12.3 billion to buy Experian.
