WeWork and SoftBank have announced an agreement under which SoftBank commits to provide significant funding to rescue the company.
This includes £3.9bn in new financing and the launching of a tender offer by SoftBank of up to £2.35bn for existing shareholders. Additionally, SoftBank will be accelerating an existing commitment to fund £1.15bn. The funding provides WeWork with significant liquidity to execute its business plan to accelerate the Company’s path to profitability and positive free cash flow.
After closing, and following the tender offer, SoftBank’s fully diluted economic ownership of WeWork will be approximately 80%. Since SoftBank will not hold a majority of voting rights at any general stockholder meeting or board of directors meeting and does not control the company, and WeWork will not be a subsidiary of SoftBank. WeWork will be an associate of SoftBank.
Masayoshi Son, Chairman & CEO of SoftBank Group Corp said: “SoftBank is a firm believer that the world is undergoing a massive transformation in the way people work. WeWork is at the forefront of this revolution. It is not unusual for the world’s leading technology disruptors to experience growth challenges as the one WeWork just faced. Since the vision remains unchanged, SoftBank has decided to double down on the company by providing a significant capital infusion and operational support. We remain committed to WeWork, its employees, its member customers and landlords.”
In connection with the agreement, WeWork’s board will appoint Marcelo Claure, Chief Operating Officer
of SoftBank Group Corp., to the position of Executive Chairman of the Board of Directors of WeWork,
effective upon closing of the accelerated £1.15bn payment commitment. Adam Neumann, the
founder of the Company, will become a Board observer. The size of the Board will be expanded and it
will receive voting control over Neumann’s shares.