Regus makes £40m move to beef up presence in London

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OFFICE rental firm Regus has tabled a £40m bid for London’s largest serviced office provider as it seeks to boost its presence in the capital.

The deal to buy MWB Business Exchange will add 64 business centres across the UK to its existing network, including a further 39 centres across London.

Regus said that, while it was too early to give an idea of the exact impact on staff, it expected there would be job cuts to strip out duplication in areas such as corporate and support functions.

Regus is hoping to secure a further slice of the London market though the Business Exchange takeover.

Business Exchange was formed in 1996 by MWB, formerly known as the Marylebone Warwick Balfour Group, through the acquisition of five serviced office centres.

It has since grown to become the biggest serviced office provider in London.

Shares in Business Exchange rose after yesterday’s offer was unveiled.

Regus has 1,200 sites worldwide, of which around 140 are in the UK, serving customers including Google, GlaxoSmithKline and Nokia.

It opened 139 new locations last year, although only three of these were in the UK. It plans to have 2,000 sites by 2014.

Group profits more than doubled to £50.6m last year after it grew sales by 12 per cent, helped by the opening of new sites and through cost savings as it renegotiated leases.

In the UK, gross profits nearly doubled to £29.7m.

According to its website, MWB Business Exchange’s serviced offices include Copthall Bridge House in Station Bridge, Harrogate and 1 Whitehall Quay in Whitehall Road in Leeds.

Business Exchange, which employs around 500 staff, is 75 per cent owned by MWB Group – the company behind Malmaison and Hotel du Vin hotels that collapsed into administration in November after failing to secure a refinancing of the business.

But Business Exchange and the Malmaison and Hotel du Vin chain were unaffected by the failure of MWB.

Last month, Gary Davis, the chief executive of Malmaison and Hotel du Vin, revealed that the company was on course to achieve profit and turnover growth.

MWB’s administrators Deloitte said they will put the 75 per cent stake owned in Business Exchange out to tender for eight weeks after yesterday’s offer announcement to give other suitors the chance to table a higher offer.

If a better offer is received, Regus has the option to out-bid by at least £500,000.