WeWork and SoftBank have announced a deal that will see SoftBank take over 80 percent of the struggling real estate company.
Marcelo Claure, the former boss at Sprint which SoftBank acquired in 2012 will take over as the executive chairman at WeWork.
Adam Neumann, the founder, and CEO who is receiving more than a billion dollars to leave will become a “board observer” without voting power. Artie Minson and Sebastian Gunningham remain co-CEOs of WeWork.
SoftBank is already WeWork’s largest investor, to the tune of more than $10 billion. The new deal includes $5 billion in further funding, $1.5 billion that had already been pledged for the future, and a $3 billion tender offer for existing shareholders outside SoftBank. WeWork claims, however, that SoftBank won’t have a majority of voting rights at any company meeting, making it an “associate” rather than a subsidiary.
SoftBank CEO and chairman Masayoshi Son downplayed the nature of what can really only be described as an extraordinary bailout.
Son in a statement said, “It is not unusual for the world’s leading technology disruptors to experience growth challenges as the one WeWork just faced.
“Since the vision remains unchanged, SoftBank has decided to double down on the company by providing a significant capital infusion and operational support.”
Son has become a big presence in tech investment in recent years with SoftBank’s massive Vision Fund, making huge deals that are very much hard to match.
