US: WeWork to be taken over by Softbank

WeWork co-founder Adam Neumann will reportedly get about US$1.7 billion under a deal in which SoftBank will take control of the troubled company, reported the Wall Street Journal. 

Under the deal, the potential valuation of WeWork would drop to about US$8 billion, a stunning fall from its peak of US$47 billion, and an additional embarrassment for a company that was supposed to go public not long ago. Under that new expected valuation, SoftBank would have put more money into WeWork to date than the company is worth.

The We Company was said to be weighing at least two last-ditch financing options this week, the other being a possible loan package put together by JPMorgan Chase, to avoid running out of money after its disastrous attempt at an IPO.

As part of the deal, SoftBank, which already owns about a third of the company, is to buy nearly US$1 billion of stock in WeWork’s parent from Mr. Neumann, who was forced out as chief executive after pushback from prospective investors scuttled the IPO.

Full Content: Wall Street Journal

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