SoftBank has officially offered $3 billion for WeWork stock in a move that’s been anticipated for some time, according to a report by Bloomberg.
WeWork agreed to the deal last month, and it expires April 1. The money is part of a $9.5 billion rescue effort from the venture capital firm, who had to step in after a failed IPO attempt and talk of a toxic work culture that saw the company flounder in value.
As a part of the deal, WeWork Co-Founder and ousted CEO Adam Neumann will be allowed to sell up to $970 million in stock.
WeWork was close to bankruptcy, and SoftBank, which had already invested deeply in the company, was forced to step in. Many WeWork employees, who are facing the potential loss of jobs as SoftBank tries to right the ship, expressed distaste for the terms received by Neumann.
Recently, WeWork announced 2,400 layoffs, which equals about one-fifth of its workforce.
The money was supposed to come through five days after the initial cash injection of $1.5 billion, and execs at WeWork had been working to either change or shrink the offer.
The offer, with both the original equity money and the tender, includes about $5 billion in debt financing. After all is said and done, SoftBank will own almost 80 percent of WeWork. The company currently holds a valuation of around $8 billion. Recently fired workers won’t be eligible for the tender offer.
In a staff presentation earlier this week, new WeWork Chairman Marcelo Claure tore up the old business model of the company and promised the group would move away from taking on long-term leases in many cities. While the firm would still sign its own leases in the top 12 or so markets, such as London and New York, it would make deals to manage properties for landlords in other places instead.
The changes are part of Claure’s roadmap to get the firm to profitability.
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