Vindication for IWG boss with £320m Japan deal
THE boss of shared- office business IWG may have been popping a few corks last night after agreeing the firm’s first franchising deal in Japan.
Worth £320m – more than double the best-case estimates of analysts at Peel Hunt – it comes as vindication for IWG’s chief executive Mark Dixon.
Last year he walked away from takeover talks with a number of private equity firms, slamming the bidders for ‘totally mispricing’ his business.
Dixon’s new franchising strategy, dubbed a ‘ Plan B’ by several analysts after the failed takeover negotiations, will see it sell some of its office buildings and instead charge a fee to other firms for using its branding.
Japan’s TKP Corporation, a provider of conference rooms and banquet halls, will buy all of IWG’s 130 office centres in the country and pay £320m in cash – even though the branch generated only £20.6m of profit last year.
Peel Hunt’s Andrew ShepherdBarron added: ‘More sales will follow, which should further validate the new strategy, release substantial value and lead to a complete re-appraisal of the company. Special dividends or cash returns seem likely.’
Shares shot up by 21.1pc, or 58.3p, to 334p.
Indivior, the heroin addiction treatment manufacturer accused of fuelling America’s deadly opioid epidemic, continued its rollercoaster ride on the stock market.
Its shares tumbled more than 70pc last week after prosecutors in the US claimed the firm had used shaky evidence to promote a new version of its Suboxone treatment above rival products.
The US Department of Justice demanded at least £2.3bn in fines. But the shares were up 19.1pc, or 6.74p, to 41.97p yesterday, after analysts at Bernstein suggested the final sum of any fines is likely to be much lower.
Suboxone film, the treatment at the heart of the legal claims, generated £2.2bn for Indivior in the investigated years of 2010 to 2014. Other drugs giants, such as
Glaxosmithkline (down 0.1pc, or 1.2p, to 1550p) and Johnson & Johnson, which have found themselves in similar situations in recent years, were slapped with fines equivalent to just a fraction of the offending drug’s sales.
As for Reckitt Benckiser, which owned Indivior at the time of the alleged offences, analysts at Barclays said the US troubles would be ‘ a smaller banana skin than feared’. Reckitt is unlikely to face criminal charges, Barclays said, and will probably only have limited exposure to any civil law penalties. However, shares were still down by 1.4pc, or 82p, at 5823p.
Mining heavyweight Rio Tinto was weighing on the FTSE 100, as it announced plans to plough £230m into its Resolution Copper project in Arizona.
It will use the money to make sure it has done all of the relevant research, and completed all the surveys and assessments, to ensure it is granted permits to get the mine up and running.
Rio claims the Resolution project could supply almost 25pc of the US’s copper consumption, and it will now have spent more than £1.5bn on its development.
Shares slipped by 1.4pc, or 69p, to 4702.5p, while the FTSE 100 ended the day flat, down a minimal 0.19 points, at 7436.87.
Energean Oil & Gas joined IWG and Indivior among the FTSE 250’s top climbers, after making a gas discovery at its Karish North field off the coast of Israel. Its shares soared by 8.5pc, or 66p, to 846p.
Sanderson Group, which supplies technology to retailers and their wider supply chains, said results for the six months ending in March were ahead of expectations. Shares jumped 8pc, or 7.5p, to 101p.