SoftBank had agreed to buy the shares from Neumann,
“SoftBank remains fully committed to the success of WeWork and has taken significant steps to strengthen the company since October, including newly committed capital, the development of a new strategic plan for WeWork and the hiring of a new, world-class management team,” said
SoftBank shares rose 2.5% while the broader Japan market fell.
A WeWork committee of two independent directors voiced disagreement over SoftBank’s decision and suggested there may be legal action.
“The Special Committee is surprised and disappointed at this development, and remains committed to reaching a resolution that is in the best interest of WeWork and its minority shareholders, including WeWork’s employees and former employees. The Special Committee will evaluate all of its legal options, including litigation,” the committee, made up of Benchmark’s
The share purchase was hammered out in October as part of
WeWork signs long-term leases with landlords around the world and then rents that space to smaller companies and freelance workers, a business that has been particularly vulnerable to the coronavirus and economic slowdown. In a letter to bondholders,
“Given our fiduciary duty to our shareholders, it would be irresponsible of SoftBank to ignore the fact that the conditions were not satisfied and to nevertheless consummate the tender offer,” Townsend said.
In the past few weeks, the shareholder buyout deal has become increasingly contentious. SoftBank
The two WeWork independent board directors
The latest deal is separate from SoftBank’s bailout of WeWork itself, a package that included $5 billion in new financing and the acceleration of an earlier $1.5 billion commitment. Most of the money would have gone to five shareholders, including Neumann and the venture capital firm Benchmark, which was looking to sell $600 million in shares, Bloomberg
Still, the transaction has repercussions for WeWork. As part of the deal, the company would have gotten $1.1 billion in debt financing from SoftBank if the share purchase was completed. The Japanese company has decided it is not legally obligated to provide that capital, although it may yet do so, according to a person familiar with the matter.
SoftBank and its affiliates have committed more than $14.25 billion to WeWork to date, including $5.45 billion since October, the company said in its statement. WeWork had $4.4 billion in pro forma cash and cash commitments at the end of 2019, SoftBank said.
Separately, SoftBank said it completed the sale of its U.S. unit
(Updates with details on financing in 13th paragraph)
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