Jelmoli unveils break-up plan

Swiss retailer Jelmoli announced on Tuesday that it intends to split the company's real estate and investment businesses into two independently listed companies. Jelmoli said the separation is a result of the company's strategic review announced in December. 'We have undertaken a thorough strategic review of our business and, together with our advisors, have determined what would be in the best interests of the company and the shareholders. The creation of the two companies will allow the two management teams to have the focus, flexibility and suitable capital structure to flourish in their own sectors,' said Jelmoli's chairman Christopher Chambers.

The Swiss retailer said that the real estate subsidiary will continue to operate under the name of Jelmoli, and will consist of Jelmoli's Swiss real estate portfolio, including current development projects. The investment unit will instead consist of liquid funds, Jelmoli's participations in Russia, Algeria and Seiler Hotels as well as the Molino restaurant, the Beach Mountain sports stores and Fundgrube. Under the plan, the creation of the two businesses will take the form of a tax-neutral distribution of the shares of the investment company, resulting in Jelmoli shareholders holding shares in the two units. Jelmoli said it intends to compensate the current controlling shareholder, Pelham Investments, for relinquishing its voting majority with a reverse premium.

Pending shareholder approval, the company expects the split-up to take place by early 2009.