WeWork ‘accepts takeover by Softbank’
Japanese investment giant Softbank is set to take control of WeWork after the office sharing firm’s plans to raise money via stock markets collapsed.
WeWork’s board has reportedly accepted an offer in which Softbank will buy billions worth of shares, including $1bn from co-founder Adam Neumann.
The rescue deal provides much needed cash to WeWork.
However, the agreement values the firm at about $8bn (£6.1bn) – a fraction of previous valuations.
Softbank, which already owned about a third of WeWork, had earlier valued the firm at nearly $50bn.
Reports say that in exchange for his shares, a $185m consulting fee and a credit line, Mr Neumann agreed to back the rescue plan over a rival offer from JP Morgan. He is also expected to step down from WeWork’s board.
The Wall Street Journal first reported terms of the deal.
Mr Neumann was forced out as chief executive last month after WeWork’s share offering ran into trouble, as investors questioned his leadership and the firm’s mounting losses.
The company, which rents out office space to small firms and freelancers, has grown from a single office in New York City to more than 500 locations around the world. But it lost about $900m in the first six months of this year.