2 FTSE 250 dividend stocks with takeover potential that I'd buy with £2,000 today

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At the beginning of this year, serviced office provider IWG(LSE: IWG) was deep in talks with Brookfield Asset Management over a possible sale.

According to initial indications, Brookfield had valued IWG at £2.5bn, but was initially rebuffed. Discussions continued, but no formal deal was agreed as it seems the two parties could not agree on a price.

Despite this setback, I believe it's only a matter of time before IWG, which was formerly known as Regus, sells itself to a more substantial peer.

Increasing competition

Despite being one of the world's largest serviced office providers, IWG is struggling due to the rapid expansion of WeWork that uses a similar model. Indeed, WeWork has only been in existence for a few years but is already valued at more than $20bn, compared to IWG's market cap of £2.2bn.

Mark Dixon, IWG's founder, CEO and currently the largest shareholder, believes the company has what it takes to fend off this young competition. Unfortunately, the figures don't seem to support this conclusion.

According to a trading update issued by the firm today, revenue across the enterprise at all business centres increased by 9% in the first three months of 2018. Group revenue rose 6.7%, including the impact of new premises. Excluding new office space, mature income declined 3.6% at "actual rates". During the quarter, 46 new locations were added and it plans to spend an additional £200m on new office space over the remainder of 2018, growing overall space by 11%.

IWG might not be growing as fast as it once was, but the company is still as profitable as ever. Returns on investment on a 12-month rolling basis, for those locations open on or before 31 December 2013, were 17.8%, a desirable ratio for the business.

These returns, coupled with its attractive cash generation, lead me to conclude that it will only be a matter of time before IWG becomes a bid target again and, in the meantime, investors can benefit from the group's lucrative dividend policy.

At the time of writing, shares in IWG support a dividend yield of 2.5%, which might not seem like much, but the distribution is covered 2.5 times by earnings per share. Oh, and the company has a history of increasing the payout at a double-digit rate every year.

Time for a takeover?

Another FTSE 250 dividend stock that I believe is set for a takeover is Spire Healthcare(LSE: SPI).

I should say that this is not a dividend champion in the traditional sense. Shares in Spire only currently yield 1.6%. However, the payout is covered four times by earnings per share, leaving plenty of room for growth in the years ahead -- and flexibility if revenues come under pressure.

With earnings projected to expand by 49% this year and 14% for 2019, it's entirely possible that management could increase the payout in the years ahead as well, as Spire builds on its capital investments made over the past few years.

There's also a chance that the company could fall prey to a larger competitor. Last year, the private hospital provider was linked with South Africa's Mediclinic. Mediclinic, as well as its FTSE 100 peer NMC Health, could return to make an offer for the firm as they continue to expand their private healthcare empires around the world.

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Rupert Hargreaves owns no share mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.