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WeWork rival IWG reviews separating its digital and technology assets

WeWork rival IWG reviews separating its digital and technology assets

The 30 St Mary Axe skyscraper, which is known locally as The Gherkin and a building in which International Workplace Group (IWG) provides office space, is seen in London, Apr 24, 2014. (File photo: Reuters/Stefan Wermuth)

Office rental company International Workplace Group (IWG) is considering whether to separate its digital and technology businesses from its real estate assets, the company said on Tuesday (Nov 2), breaking its silence over a media report in September about a possible break-up.

The owner of the Regus and Spaces brands, which has offices in more than 3,300 locations across 110 countries, said it had started to assess the strategic and commercial rationale for such a move and would provide updates in the first half of 2022.

"The potential to more broadly leverage the intellectual property of the group, together with the ownership structure of the property portfolio, is the subject of further review," the company said in a trading statement.

In September, Sky News reported that IWG was exploring a multi-billion-pound break-up and said the company was also considering a US listing for its workspace booking app Worka.

IWG Chief Executive Officer Mark Dixon declined to comment on Tuesday about either the profile of the businesses under review or any financial aspects.

IWG's London-listed shares were 2.3 per cent higher by 12.45pm GMT (8.45pm, Singapore time), outperforming the FTSE 250 index, which was down 0.1 per cent.

"The rationale is to release any hidden value. It is early days," said Andrew Shepherd-Barron, analyst at Peel Hunt.

"IWG is always keen on hidden value wherever possible and has done it in the past through the sale of master franchise agreements. But it is not yet obvious there is hidden value here to be released," Shepherd-Barron said.

Besides its physical office spaces, the company has several digital businesses which allow customers to find and book workspaces online, such as Worka and Meetingo.

IWG said its revenue fell 0.3 per cent in the third quarter to £550.8 million (US$752 million) as a rise in COVID-19 cases around the world hit client plans to bring staff working remotely back to offices.

IWG said occupancy at its pre-2020 operations was 71.2 per cent in the third quarter, only slightly higher than 70.1 per cent a year ago.

The company said, however, that the outlook for the remainder of the year remained encouraging.

Source: Reuters/ng

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