FTSE 100
Reports of CVC Capital Partners approaching IWG PLC sent its shares soaring during yesterday’s trading session, surging by more than 25 per cent. However, in today’s trading session, the IWG share price has opened with a huge gap-down of over 20 per cent. At press time, the intraday trading session has seen prices surging, bringing its total price loss to less than two percentage points.
According to the reports, the CVC Capital Partners expressed interest in IWG’s digital arm, The Instant Group, in a deal that could end up costing about £1.5 billion. According to sources, the approach was triggered by Tim Rodber, The Instant Group’s chief executive, who has been marketing the business to a number of private equity firms in recent weeks.
The Instant Group has already shown interest in going through with the sale of their business and has approached Wells Fargo to advise them on the potential disposal. If the deal goes through, the IWG will be able to generate more money than its current market value, which could further see its share price soaring again. If successful, the sale will also come at a time when the IWG value has halved year-to-date and was in a strong bearish trend before yesterday’s surge that changed its trajectory.
As seen above, the IWG surge during yesterday’s trading session was largely triggered by the possibility of the company selling its digital arm for £1.5 billion. Based on the chart below, the IWG share price was also in a long-term bear move before yesterday’s spike.
However, the current deal with CVC will likely change the IWG price trajectory to the upside if it goes through. Therefore, there is a high likelihood that we might see IWG share price trading above the 200p price level in the next few trading sessions. However, a trade below the 150p price level will invalidate my long-term bullish analysis.
This post was last modified on Nov 08, 2022, 13:11 GMT 13:11