GS Retail: Equity Spin Off of Parnas Hotel and Freshmeat Subsidiaries

• On 3 June, GS Retail (007070 KS) announced that it will spin off Parnas Hotel and Freshmeat subsidiaries to simplify its business structure and enhance shareholder value.

• The company plans to create a new entity tentatively called Parnas Holdings which will include Parnas hotel and Freshmeat (a meat processing company).

• We have a positive view of GS Retail's decision to conduct this equity spin off which simplifies the business structures and it could raise the valuation multiples of GS Retail.

On 3 June, GS Retail (007070 KS) announced that it will spin off Parnas Hotel and Freshmeat subsidiaries to simplify its business structure and enhance shareholder value. The company plans to create a new entity tentatively called Parnas Holdings which will include Parnas hotel and Freshmeat (a meat processing company).

The equity spin off ratio is 0.8105782 (GS Retail) to 0.1894218 (tentative name Parnas Holdings). The effective date of the equity spin off will be on 26 December 2024. The listing date of the new entity (Parnas Holdings) will be on 16 January 2025.

Conclusion First - We have a positive view of GS Retail's decision to conduct an equity spin off of the Parnas hotel and Freshmeat businesses. This move simplifies the business structures and it could raise the valuation multiples of GS Retail relative to BGF Retail based on P/B valuations. GS Retail is also cancelling 1.3 million treasury shares (1.2% of outstanding shares).

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