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according to the FT IWG are already in negotiations to sell Spaces to the American Outfit you mention called Wework or The We company as they call themselves, this makes a lot of sense given they (The We Co) burn cash at an enormous rate and have funding expectations reduced by Softbank from $16 billion to £2 billion. They probably need to IPO, Spaces would add a lot of value given it is likely to be 50% of its current size by the end of the year and WEwork funding recent round was based of a $47 billion valuation - mental i know- but the thing is if Wework dont buy them and still IPO, then i think Spaces could be hived off in a US - IPO at the same time feeding off the hype- they almost need to do the deal, it so dramatically impacts their numbers on a value per customer basis which is how they like to report - wonderful
https://finance.yahoo.com/news/edited-transcript-iwg-l-earnings-200137168.html
50g would like to know what the offers were but alas unlikely to hear anything on that I do think they have a positive future and still expect further bids after 6 month lapse I would hope that we see £5 within a couple of years
This was from 2015, £4 billion valuation would give you a SP of £4.39 and Dixon has 25% that's a nice round number for him- and id be quite pleased myself http://www.thisismoney.co.uk/money/markets/article-3229856/MARKET-REPORT-Office-rental-giant-Regus-ripe-4bn-takeover-bid-rumours-gather-pace.html
Guestimation I am interested with your knowledge of the industry do you think medium to longer term a strategy of offices in some prime but also a lot of secondary locations with national networks will never take off ? For what its worth i think the strategy is a big risk, but the positives i see it have implications for quality of life issues the younger generation struggling to afford residential property in London or other major cities ? Travel costs, environmental issues etc I know they may not be deemed sexy, but ultimately there may be a market for cheaper and functional secondary if that is that where they are headed? A kind of Ryanair of offices they like flying to secondary locations and they haven't done too bad over time though they have plenty volatility too- ******* of pilots probably not a good move
Guesstimation You are right to a point The modern trendy office startups are hitting Regus badly in London, But they are buying market share and wont make the profit s you are statiing, they have highly inflated market valuations but don't report on profitability IWG has a different offering trying to grow national networks etc takes a long time but they have good infrastructure and a platform to grow on they intend to spend more on investing in their platform which will hit profit in the short term but as you say it is growing market. I am hoping they are very cheap at this level.
Very much a share for the future, there is probably a six month lag between an upturn in sales activity to bottom line income improvement being reported, they are taking a prudent approach to property avoiding London for now which seems sensible, they've got a very efficient operating model, there is competition but they are not operating in a sustainable way and whilst being a price issue in the longer term they may be acquisition targets.
Good results on the basis that there was a lot of tidying up done, closing centre's dealing with weak markets,. they took advantage of a massive tailwind with currency benefits enabling them to report profits and turnover in line with management expectations, they are now in great shape to move on. The share price has been held back by Dixon selling but this story has a long way to go