The world’s largest serviced office group IWG (IWG) has received a takeover approach, sending its share price up 26% to 252.2p.
The all-cash proposal has been made by Canada’s Brookfield Asset Management and private equity house Onex. No details have been made with regards to price and it is important to note that a firm offer has yet to be made.
The takeover interest ends months of speculation over the future of the company. When rumours of a private equity takeover arose during the summer, IWG refused to comment on ‘market speculation’.
The company operates in 100 countries and is best known for its Regus brand. Recently it has been under pressure from rival WeWork, which targets start-ups.
IWG lost a third of its value in October when it released a profit warning stating that operating profit for 2017 would be ‘materially below market expectations’.
The founder of IWG, Mark Dixon, has also been selling down his position in the company. In June he sold £92.4m of the company’s shares which sparked a 6% decline in its value.
This sale represented a 3% stake of the company. He retains a 25.2% holding in IWG, the company he set up in Brussels as ‘Regus’ in 1989.
This was not the first time Dixon had sold stock; in 2015 he sold £73.5m worth of equity and last year sold a further 4% stake in the company.
IWG has been under pressure since the Brexit vote which has created uncertainty over whether the financial sector might move jobs to mainland Europe. This could potentially hurt demand for office space in London and thereby negatively impact IWG.
