SoftBank Will Not Buy $3 Billion in WeWork Stock
Posted on 04/02/2020
The planned US$ 3 billion tender offer for financially-troubled WeWork (The We Company) to Japan-based SoftBank Group Corporation is not going through. The deadline for the tender offer was April 1, 2020. The U.S. regulatory probes into WeWork was a reason that SoftBank could use to back out of the share transaction. SoftBank’s decision to back away from the share deal is a blow to early venture backers of the company and WeWork co-founder Adam Neumann. SoftBank’s payment for the WeWork shares would have gone to the selling shareholders. SoftBank could be sued for the decision to back out by venture investors of WeWork.
Adam Neumann will not have his payday, as he was prepared to received around US$ 1 billion by tendering his portion of WeWork shares to SoftBank.
Softbank remains committed to providing up to US$ 5 billion in debt to WeWork to assist its working capital, as the investor still has equity exposure to WeWork. Masayoshi Son’s SoftBank empire flooded WeWork with billions before the company filed its prospectus.