Does this present a Takeover opportunity for you?
Will IWG get a large cash injection from selling Spaces? Could IWG shares benefit?
- The chart shows the IWG share price movements since mid-August.
- On 28 Oct, the FT reported that Guy Hands’ private equity firm Terra Firma was in talks with IWG to spin-off its subsidiary Spaces.
- Spaces is a competitor to fast-growing US brand WeWork.
- Shares now at 233p (at time of writing)
- Will IWG return the cash from the potential divestment to shareholders as dividend?
- Could expectations of this drive IWG shares higher?
- Source: Bloomberg, FT, Reuters, DJ Newswires
Trading IWG – An Example
Let’s say you think that IWG is likely to rise further as a result of a takeover offer, towards September highs of 253p. You decide to buy exposure to £10,000 worth of IWG using a CFD, at the current price of 233p. To do this, you need £2,000.
For the purpose of this example, let’s assume the IWG share price rises by 15%. Your profit would be £1500, from your initial investment of £2,000.
Conversely, let’s assume you open the above position, and place a stop-loss at 7% from the current price. Sentiment towards a deal turns sour and IWG shares fall 7% and hit your stop-loss. Your loss would be £700.
This is provided for information purposes only. It should not be taken as a recommendation.