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IWG to raise £300m in bond offering for acquisitions

Wed, 2nd Dec 2020 08:01

(Sharecast News) - IWG said it would raise £300m in a convertible bond issue to help pay for a string of planned acquisitions at attractive prices.
The FTSE 250 workspace provider said it expected increased demand for flexible workspace after the changes wrought by the Covid-19 pandemic. Companies are rethinking their office requirements after employees worked from home successfully during the crisis.

IWG said it was investing in growth initiatives and that opportunities to buy "brands, centres, services and technologies" at realistic prices had emerged. They include a UK acquisition, a bolt-on US purchase in the final stages of due diligence and other potential deals in Europe, Asia and the US. In total the deals would cost more than £300m in cash, it said.

The company said: "The net proceeds from the issue of the bonds will provide IWG with the additional financial flexibility to capitalise on these opportunities and also retain a strong financial position in the current market environment. The issue of the bonds will also diversify the company's sources of funding as well as further strengthen IWG's liquidity position and maturity profile and reduce its weighted average cost of capital."

IWG shares fell 7.1% to 326.60p at 08:20 GMT.

The bonds will pay between 0.5% and 1.25% a year with an initial conversion price at a premium of between 35% and 40% above the volume weighted average share price between launch and pricing of the offering. The bonds will be convertible into equity only in limited circumstances before June 2021.

IWG, formerly known as Regus, will hold a shareholder meeting on or near 21 December to seek shareholder approval to issue shares for the purpose of settling conversions of the bonds.

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