SoftBank to 'double down' on WeWork, take 80% stake
SoftBank has reached a deal to take control of WeWork.
The office-sharing company announced Tuesday evening that the Japanese tech giant SoftBank will provide $5 billion in financing and a tender offer of up to $3 billion for existing shareholders. SoftBank will accelerate an existing $1.5 billion funding commitment.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
The deal will give the Japanese conglomerate an 80 percent stake in WeWork when it closes, valuing the company at about $8 billion.
“SoftBank is a firm believer that the world is undergoing a massive transformation in the way people work,” said Masayoshi Son, CEO of SoftBank Group Corp. "WeWork is at the forefront of this revolution."
SoftBank shares fell 2.5 percent in Tokyo, paring this year's gains to 17.7 percent.
“It is not unusual for the world’s leading technology disruptors to experience growth challenges as the one WeWork just faced," Son added. "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.”
SoftBank Chief Operating Officer Macelo Claure will become executive chairman of WeWork's board. WeWork founder and non-executive chairman Adam Neumann will become a board observer, and give up control of his shares to the board. Neumann will receive as much as $1.7 billion as he exits, the Wall Street Journal reported on Tuesday.
CLICK HERE TO READ MORE ON FOX BUSINESS
WeWork was valued at $47 billion at the time of SoftBank’s last investment – in January. The company pulled its initial public offering on Oct. 1 after its market value was estimated at just $10 billion to $12 billion.