Serviced offices provider IWG considers three-way split

One of the world’s biggest providers of serviced offices is considering a plan to split itself into two or maybe three separate divisions.


Mark Dixon, chief executive and founder of IWG, said there was a “value gap” between what he and his team thought the group was worth and the value that the stock market had ascribed to it.


That difference has been highlighted by the recent flotation of WeWork in New York. Though smaller and loss-making, WeWork’s stock market debut valued it at about £6.6 billion; by contrast, IWG, best known for its Regus brand, has a market capitalisation of just over £3 billion.


“We think there is more value ... so we are working on the best way to represent that,” Dixon, 61, said. “WeWork loses billions of dollars, our company makes hundreds of millions of dollars in real money. We’re a bigger company — yet they are worth much more.” He said he was looking at dividing IWG into two or three units: one would be a leasing company, another would handle the technology that underpins its apps and platforms and a possible third division would encompass its franchising business. A take-private deal was “not on the cards”, he added.


IWG is the world’s biggest serviced offices provider, with about 3,300 centres in 120 countries. The FTSE 250 constituent operates the Regus and Spaces brands. Dixon, its biggest shareholder, has a 28.5 per cent stake.


Stripping out currency movements, revenues in the three months to the end of September were almost unchanged from the same period last year at £620.7 million. “Year-on-year [revenue] is flat, but we’ve got fewer costs so more profit,” Dixon said. “We’ve made it very clear that we’ve got very good momentum into the fourth quarter and we’re optimistic about next year.”


IWG shares were up ½p, or 0.1 per cent, at 307½p at the close.


The Times (Tom Howard) -

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