Regus, the UK-based serviced office provider with locations across Europe and the Americas, is expected to become the subject of a takeover bid as two US suitors continue to build up equity stakes in the business.
Yesterday US hedge fund Indigo Capital LLC acquired a further 6m shares in the UK business, increasing its stake to 88m shares, or 15.1 per cent of the company’s share capital. Also active was Cantor Fitzgerald. The New York-based broker acquired a further 11.3m shares in Regus giving it a 13.18 per cent stake in the business.
It is not known whether Cantor Fitzgerald and Indigo Capital are co-operating in building up a large holding in Regus, although according to the Financial Times, observers believe Cantor may be acting on behalf of Indigo. If combined, the two stakes would give the owner a 28.2 per cent stake in Regus, less than two per cent short of the 30 per cent level which would trigger a mandatory offer for the entire issued capital of Regus.
Speaking in today’s UK newspaper The Times, Roberto Woldenberg, managing director of Indigo, said he could not rule out an eventual bid for the group. This sentiment was re-affirmed via a stock market announcement from Indigo, in which the firm said it was 'interested in exploring a wide range of strategic, commercial and financing alternatives with the board of Regus, one of which may include a recommended take-over.'
It is not clear what implication an offer for Regus would have on UK private equity firm Alchemy Partners’ acquisition in December of a 58 per cent stake in the company’s UK division, which marketers consider to be the most valuable asset of the Regus network.
According to an Alchemy spokesperson speaking to PrivateEquityOnline today, the firm, which has invested £57m of equity capital in the UK division, is determined to remain a majority shareholder in what was “a very profitable business”.
Regus has suffered a sharp downturn in performance over the past two years, particularly in the US where the company is losing an average of £2m per month.
Speculation over a possible bid for Regus has seen the company’s share price jump by 60 per cent since the New Year to its current level of 22.5 pence.
A spokesperson for Regus confirmed that it had not received a formal approach regarding a full offer for the company.