SoftBank Signs Agreement to Take Over WeWork
The doubledown, which includes $5 billion in new financing, a $3 billion tender offer to existing shareholders, and the acceleration of an existing commitment for another $1.5 billion in funding, will give SoftBank an 80% stake in WeWork but not a voting majority
CTech : 2019-10-23T09:21:05..
Japanese holding company SoftBank announced on Wednesday an agreement to bankroll struggling co-working company WeWork in exchange for gaining control of the company. With $5 billion in new financing, a $3 billion tender offer to existing shareholders, and the acceleration of an existing commitment for another $1.5 billion in funding, Softbank will increase its stake in the company from around 30% to around 80% fully diluted. The new funding will not give SoftBank the majority of voting rights. Co-founder and former CEO Adam Neumann, who stepped down to become chairman of the board following WeWork’s disastrous attempt to go public in September, will become a board observer instead. According to the announcement, WeWork’s board will be expanded and receive voting control over Neumann’s shares. reported the majority of the details, citing sources. Reuters also reported that SoftBank has agreed to pay Neumann $685 million to step down, extended him a $500 million loan to repay a credit line from JP Morgan, and agreed to pay him $185 million for a four-year position as a consultant to WeWork, though this was not confirmed by SoftBank. As Neumann currently owns around a fifth of WeWork, he would be walking away with around $1.7 billion overall.