WeWork's Founder May Not Get His Mega Payday

SoftBank is reconsidering $3B stock takeover deal
By Evann Gastaldo,  Newser Staff
Posted Mar 18, 2020 5:00 PM CDT
WeWork's Founder May Not Get His Mega Payday
In this Jan. 20, 2020, photo, people walk in front of SoftBank store in Ginza shopping district in Tokyo.   (AP Photo/Eugene Hoshiko)

The co-founder of troubled communal office space startup WeWork may not get his billion-dollar parachute after all. SoftBank, the Japanese conglomerate that was planning to bail out of the company by buying $3 billion in WeWork shares from current shareholders—including almost $1 billion of co-founder Adam Neumann's shares—is now rethinking that plan, a sources tell the Wall Street Journal and the New York Times. In a letter to WeWork shareholders Tuesday, SoftBank, which is the largest outside shareholder in the company, said the deal may not go through due to DOJ, SEC, and various attorney general investigations into WeWork; essentially, SoftBank said those probes give it an "out" from the deal, which was scheduled to close April 1.

But the deal was not explicitly canceled, and the Journal notes the letter "could be a negotiating tactic, or a way to delay the investment as markets remain volatile" thanks to the coronavirus pandemic. The virus has also reduced demand for the shared office space the company offers, notes the Times. SoftBank's reconsideration won't affect the $5 billion it agreed to lend WeWork. Neither SoftBank nor WeWork have commented on the development publicly. (More WeWork stories.)

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