IWG mulling sale of Canadian operations, says Bloomberg

Office space services provider IWG is considering the sale of its Canadian operations, according to a source cited by Bloomberg on Tuesday.

With the FTSE 250-listed company reportedly in talks with unnamed investment banks, it is said to be negotiating a possible sale of Canadian operations that include its Regus and Spaces brands, though it has not yet decided on a valuation of its businesses in the North American nation.

However, the source said that IWG, which has 3.0m square feet spread across 133 locations in Canada, would continue to receive a cut of revenue from the brands.

The sale appears similar to the company's divestment of its Japanese operations, which included around 130 flexible co-working centres, to TKP Corp earlier in the year, a deal that saw IWG enter into a strategic partnership with TKP in Japan that amounted to an exclusive master franchise agreement.

All in all, the company added six new franchise partners and commitments for over 180 locations in the first half of 2019, bringing its total number of franchise partners to 24 across 18 countries.

With the release of its interim results at the beginning of August, IWG said that outside interest in forming partnerships was high, adding that it was in discussions with a number of prospective partners

IWG shares were down 1.48% at 406.50p at 1559 BST.