CLICK TO SHARE
(Reuters) - SoftBank Group Corp (9984.T) agreed to spend more than $10 billion to take over WeWork, doubling down on an ill-fated investment and paying off its co-founder Adam Neumann to relinquish control, people familiar with the matter said on Tuesday.
The deal represents a stunning reversal of fortune for the U.S. office-space sharing start-up, as well as its largest shareholder, SoftBank, which with the latest commitments will have spent more than $19 billion on a company that is now valued at just $8 billion.
The setback comes as SoftBank Chief Executive Masayoshi Son is seeking to convince investors to participate in the Japanese company’s second mammoth Vision Fund, for which he is seeking to raise $108 billion. To stem WeWork’s bleeding, SoftBank will need to reverse its widening losses and find a way to make it profitable.
The rescue financing also marks a dramatic fall from grace for Neumann, who as recently as last month was preparing to take WeWork public as chief executive after attaining a $47 billion valuation for it in January.
While WeWork employees now face the prospect of thousands of layoffs, Neumann has secured a $685 million side deal with SoftBank to step down from the board of WeWork’s owner, The We Company, the sources said.
Post a comment.
CLICK TO SHARE
COMMENTS VIA TWITTER
SoftBank clinches WeWork takeover deal, bailing out co-founder https://t.co/Zpk2pUcQGa [https://t.co/hGH4qgya0v]
SoftBank clinches deal to take over WeWork https://t.co/pzT4hHidMc [https://t.co/hGH4qgya0v]
SoftBank clinches WeWork takeover deal, bailing out co-founder - https://t.co/8QYjP7xX48 #startups… https://t.co/fvDUdAJ34k
SoftBank clinches deal to take over WeWork - Reuters https://t.co/LGRjZ6s4mJ