IWG mulling possible break-up - report

(Sharecast News) - Shares in IWG sparked on Monday on rumours that the serviced office giant was considering a multi-billion pound break up.
The firm, formerly known as Regus, was reported to be in the early stages of examining a series of moves intended to boost shareholder value.

According to Sky News, founder and chief executive Mark Dixon is considering a possible US listing for IWG's Worka app, either via flotation or merger with a special purpose acquisition company.

Citing unnamed insiders, Sky said IWG was also exploring separating its owned property arm from its global franchising operations.

Bankers have not been appointed, although Sky said the firm was working with its corporate brokers.

Shares in the London-listed firm, which has its headquarters in Zug, Switzerland, were trading 5% higher at 301.3p as at 1300 BST.

Andrew Shepherd-Barron, analyst at Peel Hunt, said: "Media speculation suggests that IWG might spin off its in-house booking app and/or its owned property assets into a spac. Insofar as IWG is always looking at ideas that might release value, we do not see these as particularly useful.

"IWG's real estate assets are limited and more easily sold than separately listed - they are of limited value. Much more significant would be if IWG makes some further master franchise sales for healthy premia, but we do not expect significant deals until the impact of working from home on the demand for service offices becomes clearer. The possible flotation of WeWork might bring an interesting read-across for valuation, but this is nots confirmed."

Earlier this year, US rival WeWork announced it was merging with a spac. Two years ago its first attempt to float ended in failure.

Peel Hunt has a 'hold' recommendation on IWG and a price target of 315p.

IWG has not commented on the reports.