Adam Neumann, a co-founder of WeWork, and SoftBank, the largest shareholder in the cooperative, announced on Friday that they had settled their legal dispute and opened the way for WeWork just 16 months after SoftBank saved it from the collapse. , to make known.
WeWork discontinued an initial public offering in 2019 after investors shook off the company’s huge losses and criticized its management practices. Now SoftBank, a major Japanese conglomerate, wants to take the WeWork public, through a deal with a specialty sourcing company, a route to the stock market that has become popular in recent months.
As part of the rescue in 2019, SoftBank offered to buy $ 3 billion WeWork shares from Mr. Neumann, who left the company during its IPO effort, and other shareholders. But just when the coronavirus emptied WeWork office space, SoftBank said last year that it would not proceed with the purchase, which Mr. Neumann would institute that.
Under SoftBank’s original offer, Neumann would receive $ 960 million, but according to the settlement, he will receive $ 480 million because SoftBank buys half the number of shares, according to a person with knowledge of the deal.
“With this case behind us, we are fully focused on our mission to redesign the workplace and continue to meet the growing demand for flexible space around the world,” said Marcelo Claure, CEO of WeWork and a senior SoftBank manager, said.
SoftBank will spend approximately $ 1 billion on the purchase of shares from the other shareholders, also half of the amount originally agreed. The person with knowledge of the settlement also paid SoftBank $ 50 million to Neumann.
The legal dispute created uncertainty about how much WeWork each major shareholder owns. This doubt had to be dispelled to make the company stand out. The person with knowledge of the settlement said that SoftBank combined with BowX Acquisition, a special purpose acquisition company. It is not clear how advanced the talks are.
WeWork has only released insignificant financial results over the past few months, so it’s not clear how hard the pandemic hit. Many of its customers have not renewed their membership. WeWork rents space from landlords and then asks its members to use the space. To save money, he restructured some of his leases.
SoftBank also supported WeWork with billions of dollars in financing.