WeWork and SoftBank Group this week announced an agreement under which SoftBank commits to provide significant funding to the Company.
This includes $5 billion in new financing and the launching of a tender offer by SoftBank of up to $3 billion for existing shareholders. Additionally, SoftBank will be accelerating an existing commitment to fund $1.5 billion. 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 percent. 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, WeWork will not be a subsidiary of SoftBank. WeWork will be an associate of SoftBank.
In connection with the agreement, WeWork’s Board will appoint Marcelo Claure, Chief Operating Officer of SoftBank Group to the position of Executive Chairman of the Board of Directors of WeWork, effective upon closing of the accelerated $1.5 billion payment commitment. Adam Neumann, the founder of the Company, will become a Board observer.
Masayoshi Son, Chairman & CEO, SoftBank Group
It is not unusual for the world’s leading technology disruptors to experience growth challenges as the one WeWork just faced.
Marcelo Claure, COO, SoftBank Group
As important as the financial implications, this investment demonstrates our confidence in WeWork and its ability to continue to lead in disrupting the commercial real estate market by delivering flexible, collaborative and productive work environments to our customers.
