WeWork is looking at a second attempt at a public listing and should complete a settlement with SoftBank.
SoftBank and WeWork are in advanced talks about a settlement agreement with SoftBank Group Corp agreeing to a $480 million payout. Reports state that SoftBank’s agreed payout amount is worth approximately 25% of Adam Neumann’s shares in the company, half as many shares as it originally planned to purchase.
SoftBank is reportedly ready to spend almost $1.5 billion to purchase shares of early WeWork investors and employees according to the terms being discussed including the $480 million agreed with Neumann. The deal, if finalized, would represent 10.5% of WeWork shares, with each share priced at $19.19 which is the price that was initially agreed upon, according to reports. Neumann would however remain a major shareholder in the company.
WeWork filed its public-offering paperwork in August 2019 but things didn’t go as planned afterward. The company’s finances and leadership were subjected to intense scrutiny from its investors and the media. Concerns about WeWork’s leadership grew as CEO and co-founder Adam Neumann was tagged with erratic behavior. After its attempted IPO collapsed, the coworking company slashed its valuation to as low as $10 billion from $47 billion and delayed its initial public offering indefinitely.
Adam Neumann subsequently stepped down as CEO but not after receiving a $1.7 billion ‘golden parachute’ as SoftBank took majority stake in WeWork. SoftBank assigned a $5 billion valuation to WeWork at the end of the third quarter after its $2 billion investment.
WeWork is looking at a second attempt at a public listing and should it complete a settlement with SoftBank, the company will focus on its talks to collaborate with a special-purpose acquisition company (SPAC). WeWork and BowX Acqusition Corp have been in contact and the two companies could reportedly agree on a deal in the next few weeks.
WeWork is also reportedly looking at other SPAC deals as the company, according to sources, could be valued at $10 billion should it ink any deal. SoftBank contacted Neumann after a report last month that WeWork was in talks to combine with a SPAC affiliated with Bow Capital Management.
WeWork’s former CEO Adam Neumann reportedly lost out on a $185 million consulting deal last year as part of his exit package from the company. Neumann, according to reports, was handed only a portion of the deal after an executive revealed he violated an agreement with SoftBank.
Marcelo Claure, a SoftBank executive and WeWork’s executive chairman who took over in 2019 said he didn’t believe the multimillion-dollar “consulting agreement is still in force,” according to the Wall Street Journal.