Office rentals titan in £3bn bidding battle

A £3bn bidding war has broken out for IWG, sending its shares soaring nearly 23pc.

The office rental business, founded by Mark Dixon, has received cash offers from Starwood Capital and TDR Capital, while Lone Star Europe has expressed an interest.

An earlier takeover attempt by Canadian private equity firms Onex Corp and Brookfield Asset Management collapsed in February.

They were reportedly offering 300p per share but analysts expect talks with the new bidders could result in an offer of 350p – which would value IWG at £3.2bn in total.

Andrew Shepherd-Barron, an analyst at Peel Hunt, said they see ‘IWG’s going private as likely’. Yesterday shares rose 22.8pc, or 57.5p, to 309.5p.

The company, formerly called Regus, has offices in more than 3,000 locations in 110 countries and its brands include Regus, Open Office and Signature. It was founded in 1989 by Dixon.

If IWG sold for upwards of £3bn, the father-of-five would nearly double his wealth.

He owns 25.4pc of the shares – meaning he would net about £800m – and is estimated to be worth £975m.

There is speculation about whether Dixon would leave the company completely if it were sold. He was reportedly in favour of a deal with the Canadians but this was said to have been blocked by other directors. IWG is fighting a rearguard action against newer competitors such as We Work, which is backed by Japanese technology giant SoftBank.

The firm also recently warned on profits, saying it expected to report £165m for 2018.

Starwood, TDR and Lone Star have until June 8 to make a firm offer or walk away.