Shares in serviced office provider IWG soared on Wednesday after the struggling group confirmed a takeover approach, stoking expectations of a bid battle.

IWG, which was formerly called Regus and is valued at far less than its youthful rival WeWork, said it had received an “indicative proposal” from Canadian private equity groups Brookfield Asset Management and Onex.

The group, whose biggest shareholder is its chief executive and founder Mark Dixon, said there was “no certainty” the two Canadian private equity bidders would make an offer, nor what their terms would be.

IWG’s shares had risen 30 per cent to 260p by mid-morning in London, however, as forecasts of a takeover battle burnished the appeal of a company that lost almost a third of its value on a single day in October, following a profit warning.

“The approach is from private equity at the moment, but we see potential bidders from a range of parties, including global real estate developers, or those with a global ambition,” analysts at stockbroker Peel Hunt wrote in a note to clients.

“IWG is a global brand with established positions in every significant country,” Peel Hunt said, as well as being “highly cash generative and minimally financially geared”.

Set up by Essex-born former sandwich-seller Mr Dixon in 1989 after he noticed businesspeople holding meetings in hotel cafés, IWG now has almost 3,000 serviced office centres in 1,000 cities.

But its model of providing neutrally decorated business premises with receptionists and boardrooms has come under threat from the likes of WeWork — some of whose workspaces feature free Prosecco on tap — and Hubble, which offer short-term leases in creatively designed sites.

IWG has fought back with its Spaces brand, which offers hot-desking sites that it calls “business clubs”, while Mr Dixon has said he is unconcerned by competition from WeWork.

In October IWG warned that its 2017 earnings would come in materially below management’s forecasts, blaming a “pause” in a previous recovery of sales at its older office sites, Brexit-related disruption in London and natural disasters in the US.

Mr Dixon has cashed in almost £200m of IWG shares since 2016 but still owns 25 per cent of the business. Any successful offer for the group would depend on “management factors including Mark Dixon and his desire to remain involved”, said the Peel Hunt note.

The IWG chief executive was unavailable for comment.

Additional reporting by Aime Williams

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