Home » WeWork's potential acquisition of SoftBank could get rid of Adam Neumann once and for all

WeWork's potential acquisition of SoftBank could get rid of Adam Neumann once and for all

As you progress from your failed IPO and former CEO Adam NeumannExpelled, WeWork needs an infusion of cash, and fast. With reports indicating that the company will run out of money next month without new funding, The We Company, now run by co-CEOs Artie minson Y Sebastian GunninghamAccording to reports, he is considering multiple emergency financing offers, particularly from SoftBank Corp., the Japanese investment firm that has already invested $ 10.65 billion in the shared office company. But the offer comes with a notable stipulation: as part of the agreement, the possible acquisition would require Neumann to give up more power. According to multiple reports on Monday, WeWork's possible agreement with SoftBank could include Neumann resigning from the company's board of directors, where he currently still serves as non-executive chairman.

Axios reports that SoftBank is offering to pay Neumann approximately $ 200 million to leave the board of directors and give up his voting actions, officially ridding WeWork of the charismatic leader whose sometimes problematic vision and leadership have long defined the controversial business. Coworking The departure of Neumann would be part of the tender tender offer of $ 3 billion from SoftBank to take over the employees' shares, which Axios would value at $ 20 per share. According to the Wall Street Journal and CNBC, SoftBank's offer would also include $ 5 billion in debt financing and accelerate a capital investment of $ 1.5 billion scheduled for next year. (The two media also suggested that Neumann could remain on the board through an agreement, but he would see that his voting actions declined significantly.) The agreement would give SoftBank a majority stake in the company, which according to Reuters reports could fall between 60 and 80% depending on the results of the public offering, and would probably see the Director of SoftBank Operations Marcelo Claure assume the position of chairman of the board. WeWork would also value approximately $ 8 billion, far from the $ 47 billion valuation SoftBank invested earlier this year. According to reports, the board of directors will meet on Tuesday to discuss the potential offer, as well as a $ 5 billion debt package from JP Morgan Chase & Co., comprised of funds from external investors.

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Hail Marys fundraising occurs when WeWork takes drastic measures to get out of a growing financial hole. After the catastrophic OPI of WeWork, a time when, as an executive told my colleague Gabriel Sherman, the internal environment was "a shit show": Minson and Gunningham have begun to make major reforms, from firing Neumann's closest allies and unloading their $ 60 million private plane to selling some of their acquisitions. And even more cuts will come soon. According to an internal email reported Monday by Business Insider, executive co-directors said employees should expect successive layoffs "in the coming weeks," that guardian reported could affect at least 2,000 employees. (The company has also had another bad press to deal with its financial problems, as it revealed last week that thousands of phones in the office had been infected with formaldehyde.) While an infusion of cash from SoftBank or JP Morgan undoubtedly To help the company while struggling to recover, it is clear that the old technology darling still has a long way to go.

This article has been updated.

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Source: https://www.vanityfair.com/news/2019/10/wework-softbank-deal-adam-neumann

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