One of Regus’s largest shareholders has told the serviced office provider to “immediately” move its stock listing to the United States.
Buckley Capital Management stated that moving from London to New York could help boost IWG’s share price which is 60 per cent lower than its pre-pandemic levels.
Buckley wrote in an open letter addressed to IWG and its shareholders that “share prices continue to lag” despite the fact that IWG’s adjusted earnings (the company’s preferred profit measure) are on track to hit a record this year.
In the letter, Zack Buckley said: “It’s clear that there is a significant disconnect between the current share prices and the intrinsic values of the company.” Buckley Capital has its headquarters in Miami.
The London Stock Exchange does not reward IWG with a valuation multiple that we think it deserves. We believe that an IWG listing in the US would allow IWG to be exposed to a more liquid and new market, with investors who are better able understand its business model and leverage levels.
Buckley, who began investing in IWG 2023, and claims to be among the 15 biggest holders, suggested that “major share purchase” programmes should also be launched as a way to boost the share price.
Mark Dixon founded IWG in 1989. It has around 3,700 centres spread across 120 countries. Dixon, 64, a 25% shareholder, opened the first office in Brussels in 1989 after noticing local businesspeople were holding meetings in coffee shops.
IWG offers serviced office spaces under brands such as Regus and Spaces. These deals are typically shorter and more flexible than traditional office leases. The United States accounts for about half of IWG’s revenue, and a greater percentage of its profits.
The group is already in the process to adopt American “generally recognized accounting principles” for reporting its results. Sam Dindol is a Stifel broker and a business analyst. He said that the move to the US “is not new” and it appears to be a trend.
IWG would be joining a list of London-listed companies that have moved to New York. Last year, CRH, a building materials company, , made the move. Flutter, owner of Paddy Power and Indivior, a drugs manufacturer, both moved in the summer. Since CRH moved to its new primary listing, shares have risen more than 50%.
Dixon had previously indicated that he might be open to a similar move. However, he said that it was not a priority for the board. He said last month: “The listing issue is a board and investor question. But what’s clear is that more US investors are joining the register. If it’s more convenient for those investors to have us listed in the US then the board might consider that.”
Buckley stated that if shares do not respond to the move of the stock exchange listing to New York, or the share buybacks the bosses “should explore a sale in the private market”.
A spokesperson for IWG refused to comment on Buckley’s letter. IWG shares closed at 175p, up 4 1/4p or 2.5 percent.
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