IWG open to talks with private equity firms over potential takeover

Serviced office firm International Workplace Group (IWG) is understood to be receptive to a full-share takeover after it was approached by three separate private equity firms over a potential deal.

Formerly called Regus, IWG is expected to start talking to Lonestar, Starwood Capital and TDR Capital over the potential sale.

On Friday, IWG put out a statement confirming the interest of the three firms, after the company’s share price ticked up.

“The board is evaluating the possible offers with its financial advisers and shareholders will be updated in due course,” the statement explained.

Lone Star, Starwood and TDR are now required to announce their intention to put in a firm offer by 8 June, or decide to drop their interest in the full-share takeover.

The FTSE 250 company boasts around 3,000 locations in over 100 countries and 1,000 cities across the world.

Set up by Mark Dixon in 1989, IWG is now valued at around £2.1bn and last year made a profit of £149.4m.

Last year, a profit warning invited a takeover attempt from Canadian property firm Brookfield, who unsuccessfully submitted a £2.5bn bid for the company.

Read more: Office group IWG confirms private equity takeover approach

It faces stiff competition from flexible office space providers like American firm WeWork and British start-up The Office Group.

WeWork is backed by Japanese fund Softbank, and made a pre-tax loss of $939.2m last year, being valued at around $20bn.

But Fitch Ratings last year warned that London’s office market was “highly overvalued” and set for a correction this year as Brexit uncertainty and potential interest rate hikes created additional risk.

Read more: Fitch: London’s “highly overvalued” office market is set for a correction