SoftBank pulls out of $3bn WeWork tender
SoftBank has pulled out of its planned purchase of $3bn (£2.4bn) of WeWork stock.
The move is expected to lead to a legal challenge from the serviced office firm’s co-founder Adam Neumann, as well as backer Benchmark.
The $3bn tender was part of a multi-billion-dollar rescue package that SoftBank put in place as WeWork teetered on the brink of insolvency last year.
SoftBank has pulled out of its planned purchase of $3bn (£2.4bn) of WeWork stock.
The move is expected to lead to a legal challenge from the serviced office firm’s co-founder Adam Neumann, as well as backer Benchmark.
The $3bn tender was part of a multi-billion-dollar rescue package that SoftBank put in place as WeWork teetered on the brink of insolvency last year.
The collapse of the offer will also deny WeWork $1.1bn of debt, which was conditional on the offer.
Softbank said it had ended the offer because certain conditions to the tender offer, agreed in October, were not satisfied.
These conditions included new and significant criminal and civil investigations that have begun since October and actions by governments around the world related to Covid-19, imposing restrictions against WeWork and its operations, on top of failure to close various joint ventures and obtain necessary antitrust approvals.
Rob Townsend, senior vice president and chief legal officer at Softbank, said: “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.”
He added that the investor was “fully committed to the success of WeWork”, noting newly committed capital, its new strategic plan and new hires to support the co-working operator.
Former chief executive Adam Neumann, his family and large institutional shareholders, including Benchmark Capital, stood to benefit most from the tender.
Neumann and Benchmark’s combined equity made up more than half the stock tendered in the offering. In contrast, current WeWork employees tendered less than 10% of the total.
