IWG rallies on bid speculation

Shares in office space provider IWG, formerly Regus, were on the front foot on Thursday amid speculation it might be taken over.

According to M&A blog Wall Street Wires, IWG is working with an investment bank on a sale and in talks with various bidders.

"Although shares of the office space specialist have had a rather mixed history, it would appear according to an exclusive Wall Street Wires Deal Rumour, that the journey for shareholders will finally be concluded in a satisfactory way.

"According to the newsflow so far this year the fundamentals have been healthy, with the company able to announce the hiking of its dividend by 13% in February off the back of profits and revenues being up sharply during 2016. However, it would now appear that the company is looking to crystallize this success."

In its first-quarter trading statement early last month, IWG said revenues were up 9.1% to £580.7m compared to the same period a year ago, or 1.5% higher at constant exchange rates. In addition, the company expressed confidence that it would deliver a full-year performance in line with management's expectations.

"Our approach to growth investment continues to be disciplined and flexible. After being even more selective during 2016, we see an opportunity to increase the number of new locations this year, particularly within our Spaces co-working format, which is addressing an underserved segment of the workspace-as-a-service market. Our approach to risk management remains rigorous and we are encouraged by the increase in more capital efficient growth we now see in the pipeline for 2017."

At 1055 BST, the shares were up 4% to 380p.