The Japanese tech company has abandoned plans to buy $ 3 billion worth of WeWork shares from existing shareholders and investors, SoftBank and a statement said. special committee of the WeWork Board of Directors.
“The closing of the tender offer was subject to certain closing conditions being met,” Rob Townsend, chief legal officer for SoftBank, said in October, said in a statement. “Several of these conditions were not met, leaving SoftBank no choice but to end the takeover bid. “
Sharing in SoftBank (( grew 3% in Toyko following the announcement. )
The face of SoftBank dramatically reduces Neumann – the October deal included a takeover offer worth up to $ 975 million from the shares of the founder of WeWork.
WeWork declined to comment, but the special committee of the WeWork board of directors said on Wednesday that it was “surprised and disappointed” with SoftBank’s decision. He added that he will assess all legal options, including litigation.
Last year, WeWork’s botched IPO left it teetering on the brink of insolvency until SoftBank intervened with an estimated $ 10 billion bailout package. The agreement allowed SoftBank to own 80% of the startup. Neuman had previously resigned as CEO amid employee and investor anger over his leadership of the company.
When presenting results last month, SoftBank CEO Masayoshi Son bragged about a turnaround plan that would see WeWork making cash flow positive in a few years.
But the global coronavirus pandemic has thrown a wrench in the works.
Drastic restrictions on work, travel and social distancing aimed at preventing the spread of the virus are putting enormous pressure on WeWork and SoftBank.
WeWork is suffering because the major cities where it operates are closed for weeks. He still has to pay long-term leases, even if companies forced by the epidemic cancel contracts with the shared office company.
Meanwhile at SoftBank, coronavirus poses a catastrophic threat to many startups, CEO Son invested money with his $ 100 billion Vision Fund. In an effort to save SoftBank’s plummeting share price, Son made a surprise announcement last week of what amounts to a $ 41 billion asset sale to buy back stocks and reduce the hefty debt of the company.