SoftBank, which is already WeWork’s largest investor, is also offering to buy up to $3 billion worth of stock from existing investors and shareholders. SoftBank’s Vision Fund will also exchange all of its interests in regional WeWork joint ventures across Asia, excluding the Japan joint venture, for shares in WeWork.
SoftBank’s stock dropped 2.5% in Tokyo after the deal was announced.
The announcement did not disclose details of Neumann’s payout, but the WeWork founder could walk away with up to nearly $1.7 billion. SoftBank’s offer to buy Neumann’s shares is capped at $975 million, and the package includes an additional $500 million loan to repay a credit line, plus a $185 million ‘consulting fee’ for SoftBank, the person familiar with the matter said.
The deal caps a turbulent two months for WeWork, during which Neumann oversaw a disastrous attempt to take the firm public. The highly anticipated IPO was shelved after investors balked at its valuation and criticized the shared workspace provider’s corporate governance.
But in a statement, SoftBank CEO Masayoshi Son downplayed the debacle.
“It is not unusual for the world’s leading technology disruptors to experience growth challenges as the one WeWork just faced,” Son said.
“The new capital SoftBank is providing will restore momentum to the company and I am committed to delivering profitability and positive free cash flow,” Claure said in a statement.