IWG’s shares tank as it ends takeover talks
The serviced office provider also warned about weakness in the UK market.
Regus owner IWG’s shares have plunged after it said it will not continue talks with a number of private equity firms which were looking to buy the company.
The serviced office provider has walked away from discussions with Starwood, Terra Firma and TDR, saying that none of them could deliver a deal at the right price.
As the stock market opened, IWG’s shares fell by 23% or 68.7p to 231.3p.
In a statement, IWG said: “The board remains confident in the long-term value of and opportunities for IWG.
“It is the global leader in the co-working and flexible workspace sector, a market that is experiencing its most exciting stage of growth in over 30 years as increasing numbers of companies look to capture the strategic and financial advantages of flexible working.”
As we reposition our UK business through talent and refurbishment investments, there will be a short term effect on revenue performance. Mark Dixon
The group also released its half-year results, which showed IWG’s profits were knocked by weakness in the UK market, which the firm said would be short lived.
IWG’s revenue rose 7.1% to £1.2 billion in the six months ended June 30.
However, operating profit fell 29% to £60 million as IWG took a hit on its UK business and invested in new staff, marketing and its continued growth.
The London-listed group has serviced offices in around 120 countries, and operates brands including Regus, Open Office and Signature.
Mark Dixon, chief executive of IWG, said: “To fully participate in the market potential, we have made significant investments into our infrastructure, growth related resources and the continued development of our strategic corporate account activities.
“As we reposition our UK business through talent and refurbishment investments, there will be a short term effect on revenue performance.”