NEW YORK CITY— SoftBank Group Corp., a Japan-based conglomerate, has won board approval of co-working firm WeWork to take over the cash-strapped company. The vote will add to the further influence Softbank has over the company who already owns a third of the co-working firm, according to reporting from the Wall Street Journal.
In the past several weeks, after a flopped initial public offering, WeWork poached both Softbank and JPMorgan Chase & Co., for a lifeline on a deadline that ended yesterday.
As part of the deal, SoftBank will buy an estimated $1 billion of WeWork parent stock from Neumann. Also, the Tokyo-based firm will grant him a $500 million credit line to partially repay a loan facility by JPMorgan of an equal amount, and pay Neumann a $185 million consulting fee, according to the news report.
The almost $1 billion share purchase is part of as much as $3 billion from SoftBank that will extend to the company's employees and investors.
In the deal with Softbank, WeWork will accept an $8 billion valuation a huge dip from its $47 billion valuation that its new manager boasted on the private market in January and several million below its $10 million to $12 million valuations in Septemeber.
Neumann stepped down as CEO not long after a firestorm of criticism ensued about its August IPO filing that outlined stunted cash-flow and a questionable corporate governance structure. Now, he is also expected to step down from the board, although remain a board observer and maintaining a stake in the company.
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Mariah Brown
Mariah Brown is the New York Bureau Chief and Real Estate Reporter for GlobeSt.com, covering the New York Metro area, Northeast region and national real estate trends. She is responsible for producing multi-media content, including articles, podcasts and video. Before joining the GlobeSt team, she served as a New York Times fellow, reported for the Associated Press in New York and Philadelphia and several other New York City-based outlets.
