SoftBank to take control of WeWork: Sources
Published 17 min agoUpdated Moments Ago
David Faber @DavidFaber
Thomas Franck @tomwfranck
CNBC.com
- SoftBank to spend $4 billion to $5 billion on new equity, existing shares, sources say.
- The deal values WeWork between $7.5 billion to $8 billion, sources familiar with the matter say.
- The deal could be announced as soon as Tuesday.
People walk out of the co-working space WeWork in the Williamsburg neighborhood of Brooklyn in New York.
Spencer Platt | Getty Images
____________________________
This is a developing story. Check back for updates.
SoftBank will take control of embattled work space company WeWork, according to people familiar with the matter.
SoftBank, led by Japanese billionaire Masayoshi Son, plans to spend somewhere between $4 billion and $5 billion on new equity, existing shares, sources say. The deal will value WeWork between $7.5 billion to $8 billion and could be announced as soon as Tuesday. It is SoftBank itself taking control, not the start-up focused Vision Fund.
SoftBank exec Marcelo Claure will be involved in the company’s management, while former CEO Adam Neumann’s stake will fall to low double digits. The SoftBank takeover marks the latest chapter in a dramatic year for what was at one point anticipated to be one of Wall Street’s hottest initial public offerings.
Last month, the start-up terminated plans to go public. Its much-anticipated IPO prospectus in August revealed a huge $900 million loss in the first six months of 2019 and drew worries over its corporate governance practices. Such concerns peaked in July, when the We Co. agreed to pay Neumann $5.9 million in stock for the trademark to “We,” previously the property of We Holdings, an investment vehicle run by the CEO and co-founder Miguel McKelvey.
Fallout from the controversies and subsequent plummet in value has led to a tense relationship between former CEO Adam Neumann and SoftBank’s Son, who has invested billions into the start-up. Neumann stepped down last month. It was also reported that SoftBank has readied a financing package to take control of the company and further sideline Neumann, who is also a co-founder.
cnbc.com |
