A struggling company will often change its name to signal a change in direction or approach but it does not always lead to a change in fortune.
It’s not like joining the witness protection programme; investors know who you are and they know where you live, so there is no escaping bad news when it comes a-knocking, as it did this morning for shareholders of IWG PLC (LON:IWG), the office space provider.
The company, still better known as Regus, plummeted after pulling out of talks with three suitors interested in acquiring the company.
The company has been “in-play” for some time and had previously received a joint approach from Canadian bidders Onex Corp and Brookfield Asset Management in December but the talks fell apart in February.
In July, real estate investor Prime Opportunities pulled out of the race to buy IWG after its offer was rejected in May.
Apparently, none of the bidders met the valuation the IWG has in mind, which either suggests the bidders are missing something or the IWG directors overrate their own abilities to turn round a business that has just reported pre-tax profits for the first half of the year that were a third lower than last year.
You say, "Regus", I say, "Aegis", let’s call the whole thing off
The shares were down 22% but that was a better performance than the 29% shed by FireAngel Safety Technology Group PLC (LON:FA.), the company that was known until June 28 as Sprue Aegis.
If I remember my Homer (the poet, not the cartoon character), “Aegis” is the Greek word for “shield” but there was no shielding the share price of the home safety products developer after a profits warning.
The company said it expects to swing to a first-half operating loss of around £1.8mln compared to a profit of £1.5mln in the same period a year ago, with sales expected to be around a third down on last year at £17.7mln.
The company said it had been hit by a number of short-term transitional issues within its supply chain, the continued weakness of sterling against the dollar and difficult conditions in the UK retail market.
Perhaps the company should have changed its name to Firefighting, rather than FireAngel.
The company’s centre of operations is switching to the US after a recent emergency fund-raising and so it is no surprise that some of its executive directors are either leaving the company or have signalled their intention to do so.
Today, the group’s head abacus-rattler, Robin Cridland, confirmed his departure date of August 31.
His departure had been flagged previously with the company indicating it would look for a US-based replacement; in the meantime, the shares rose 2.3% today as the company said it had secured an experienced chief financial officer (CFO) in Michael Norris to serve as an interim CFO.