SoftBank's Potential WeWork Takeover Could Sideline Adam Neumann
As it moves on from its failed IPO and former CEO Adam Neumann's ouster, WeWork needs a cash infusion-and fast. With reports swirling that the company will run out of money next month without new financing, the We Company, now helmed by co-CEOs Artie Minson and Sebastian Gunningham, is reportedly considering multiple emergency financing offers, most notably from SoftBank Corp., the Japanese investment firm that has already invested $10.65 billion in the office-sharing company. But the offer comes with a notable stipulation: as part of the deal, the potential takeover would require Neumann to give up even more power. According to multiple reports Monday, WeWork's potential deal with SoftBank could include Neumann stepping down from the company's board of directors, where he currently still serves as the non-executive chair.
Axios reports that SoftBank is offering to pay Neumann approximately $200 million to leave the board of directors and give up his voting shares, officially ridding WeWork of the charismatic leader whose vision and sometimes problematic leadership had long defined the controversial coworking business. Neumann's exit would be part of SoftBank's reported $3 billion tender offer to take over employee shares, which Axios reports would be valued at $20 per share. According to the Wall Street Journal and CNBC, the SoftBank offer would also include $5 billion in debt financing and accelerate a $1.5 billion equity investment scheduled for next year. (The two outlets also suggested that Neumann could potentially remain on the board through a deal, but see his voting shares greatly diminished.) The deal would give SoftBank a majority stake in the company, which Reuters reports could fall anywhere between 60 and 80% depending on the results of the tender offer, and would likely see SoftBank Chief Operating Officer Marcelo Claure take over as board chairman. It would also value WeWork at approximately $8 billion-a far cry from the $47 billion valuation SoftBank invested at earlier this year. We's board will reportedly meet Tuesday to discuss the potential offer, as well as a competing $5 billion debt package from JP Morgan Chase & Co. made up of funds from outside investors.
The fundraising Hail Marys come as WeWork takes drastic measures to dig itself out of a growing financial hole. Following WeWork's catastrophic IPO-a time when, as one executive told my colleague Gabriel Sherman, the internal mood was "an all-around shitshow"-Minson and Gunningham have started making major reforms, from firing Neumann's closest allies and unloading his $60 million private jet to selling off some of its acquisitions. And even more cuts will soon be coming. According to an internal email reported Monday by Business Insider, the co-CEOs said employees should expect rolling layoffs to take place "in the coming weeks," which the Guardian reported could affect at least 2,000 employees. (The company has also had other bad press to deal with on top of its financial woes, as it revealed last week that thousands of in-office phones had been infected with formaldehyde.) While an infusion of cash from SoftBank or JP Morgan will undoubtedly be a help the company as it struggles to get back on its feet, it's clear that the former tech darling still has a long way to go.This article has been updated.
More Great Stories from Vanity Fair
- How one industry is bleeding Wall Street dry of talent
- Ronan Farrow's producer reveals how NBC killed its Weinstein story
- Ivanka's $360 million deal is raising eyebrows at the FBI
- The big turn for Elizabeth Warren's campaign
- Why a leading neurocriminologist left Joker completely stunned
- The Fox News movie's uncanny depictions of the network's drama
- From the Archive: The real-life story of the security guard turned bombing suspect at the heart of Clint Eastwood's latest movie
Looking for more? Sign up for our daily Hive newsletter and never miss a story.
Adam Neumann, the flamboyant co-founder and ex-chief executive of WeWork, could be stripped of his outsize voting power and chairmanship of the money-losing property company under a $9.5-billion rescue proposal from its largest investor, SoftBank,
Adam Neumann, the flamboyant co-founder of WeWork, will be stripped of his outsize voting power and chairmanship of the lossmaking property company, under a $9.5bn rescue proposal from its largest investor, SoftBank, set to be
More News in Business
Infosys today elaborated on the details of the whistleblower complaint and measures being taken in view of the same, in
Equity benchmarks BSE Sensex and NSE Nifty stared on a volatile note on Tuesday as index heavyweight Infosys dampened the rally in energy and banking stocks in early trade. Shares of Infosys plunged up
Mumbai: Equity benchmarks BSE Sensex and NSE Nifty stared on a volatile note on Tuesday as index heavyweight Infosys dampened the rally in energy and banking stocks in early trade. Shares of Infosys plunged up to
Infosys shares fell 16 percent on Tuesday after whistleblower complaints accused CEO Salil Parekh and CFO Nilanjan Roy of unethical practices for many quarters. The complainants, a group of anonymous employees, also alleged that Parekh
Shares of private lender HDFC Bank rose 2.3 per cent at Rs 1,257 apiece on the BSE on Tuesday after the bank reported strong September quarter results on Saturday. The bank's standalone net profit jumped 26.8