INSUBCONTINENT EXCLUSIVE:
Confirming earlier reports, The We Company and SoftBank Group agreed to a new capital infusion which will see SoftBank committing $5 billion
in new financing and issuing a tender offer for another $3 billion in buybacks for shareholders.
The company also said it would accelerate
an existing commitment to put $1.5 billion into the short-term real estate rental company.
Report: SoftBank is taking control of WeWork at
an ~$8B valuation
Under the specific terms of the deal, WeWork will receive $1.5 billion committed from SoftBank April 2020 cash infusion
into the company at $11.60 per share
With that money expected to come in seven days after the deal is signed (subject to shareholder approval).
There also the tender offer for
up to $3 billion worth of non-SoftBank owned shares at a price of $19.19 per share, which will begin in the fourth quarter of this year,
with closing subject to regulatory approvals.
Finally there a joint venture share swap where all of SoftBank Vision Fund interests in
regional joint ventures outside of Japan will be exchanged for WeWork shares at a price of $11.60 per share& and a debt facility consisting
of $1.1 billion in senior secured notes, $2.2 billion in unsecured notes, and a $1.75 billion letter of credit facility, which will occur
after the tender offer is completed.
After the closing and the tender offer, SoftBank will own approximately 80 percent of the We Company,
according to a statement.
But SoftBank will not actually will not hold a majority of voting rights at any stockholder or board of directors
meeting, thanks to WeWork convoluted ownership structure
Therefore, even with its 80 percent stake in the business, WeWork isn&t a subsidiary, but an &associate& of SoftBank.
As part of the
agreement, the company confirmed that Adam Neumann will become a board observer and Marcelo Claure, the chief operating officer of SoftBank
Group will assume the position of executive chairman of the board of directors of WeWork — as soon as the company receives its $1.5
billion payment from SoftBank.
SoftBank reportedly ends WeWork ownership debacle with a potential $1.7 billion windfall for Adam
Neumann
&SoftBank is a firm believer that the world is undergoing a massive transformation in the way people work
WeWork is at the forefront of this revolution
It is not unusual for the world leading technology disruptors to experience growth challenges as the one WeWork just faced,& said Masayoshi
Son, chairman and chief executive of SoftBank Group Corp, in a statement
&Since the vision remains unchanged, SoftBank has decided to double down on the company by providing a significant capital infusion and
We remain committed to WeWork, its employees, its member customers and landlords.&
The vision may remain unchanged, but the story that
SoftBank will have to tell about its new &associate&
Under Neumann stewardship, We Company was a cash-burning, globe-spanning, all-encompassing community developer that would usher in a new
kind of capitalism, operating under the banner of &We&.
Now, the company is more like a struggling purveyor of temporary office space, which
has a mountain of leases it owns and is looking down the barrel of a potential cash crunch — even with the SoftBank lifeline.
Still,
SoftBank executives and WeWork new leadership are standing by their rhetoric for what the company is… and can be.
&WeWork is redefining
the nature of work by creating meaningful experiences through integrating design, technology and community
The new capital SoftBank is providing will restore momentum to the company and I am committed to delivering profitability and positive free
cash flow,& said Claure in a statement
&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.&
