A man enter the doors of the 'WeWork' co-operative co-working space in Washington, DC.
Mandel Ngan | AFP | Getty Images
SoftBank has struck a deal to take control of WeWork, the co-working company announced.
The Wall Street Journal reported Tuesday that SoftBank would hand former WeWork CEO Adam Neumann as much as $1.7 billion in exchange for his agreement to step down as chairman and give up his voting rights.
CNBC's David Faber first reported on Monday that SoftBank would spend between $4 billion and $5 billion on new equity and existing shares in WeWork's parent company, The We Co. The deal would value WeWork between $7.5 billion and $8 billion on a pre-funding basis, which is a fraction of the $47 billion private valuation assigned to it earlier.
Once the deal is completed, SoftBank is expected to own 70% or more of WeWork, according to people familiar with the matter. SoftBank COO Marcelo Claure will take control of WeWork in some capacity in the near term, while Neumann's stake will be reduced to low double digits.
Co-CEOs Artie Minson and Sebastian Gunningham replaced Adam Neumann in September after he attracted scrutiny for his unusual leadership style and apparent conflicts of interest. Late last month, WeWork pulled its IPO filing amid criticism from investors, mounting losses and a dwindling IPO valuation.
Since Neumann's departure, WeWork's new leadership has worked to get the company back on track to growth, including exploring the sale of several businesses. The company was also expected to lay off at least 2,000 people, or 13% of its staff, and more job cuts could be on the way, according to The Guardian.
This story is developing.
No comments:
Post a Comment