GS Retail to spin off Parnas Hotel, Freshmeat to untangle complicated operations

Industry

Published: 03 Jun. 2024, 18:02 Updated: 04 Jun. 2024, 09:48

GS Retail to spin off Parnas Hotel, Freshmeat to untangle complicated operations

GS Retail's logo [GS RETAIL]

GS Retail will spin off its Parnas Hotel and Freshmeat subsidiaries to simplify its business structure and enhance shareholder value.

The retail giant will create a new entity tentatively named Parnas Holdings, which will include the hotel and the meat-processing company, according to a press release on Monday.

The parent firm's shares closed at 22,750 won ($16.50) on Monday, up 14 percent from the previous session’s close.

GS Retail shareholders will receive around 0.19 shares of Parnas Holdings.

The spinoff will be carried out on Dec. 26, with a listing date for the new entity set for Jan. 16 of next year.

Additionally, GS Retail will retire a total of 1.3 million treasury stocks, which is about 1.2 percent in its outstanding shares, to increase shareholder value.

The company decided to simplify its operations as its entangled business structure has resulted in an undervaluation despite stellar performances in its core businesses, including convenience stores, home shopping, supermarkets and hotels, compared to its peers, according to the company.

Previously, GS Retail had streamlined underperforming subsidiaries like Lalavla and GS Fresh Mall to fortify the competitiveness of its core businesses.

“Our complex structure has led to the undervaluation of our businesses, thus, we believe that this spinoff will serve as a prime example of enhancing corporate competitiveness and shareholder value,” GS Retail’s spokesperson said.

BY CHOI HAE-JIN [choi.haejin@joongang.co.kr]