The We Company (“WeWork”) and SoftBank Group Corp. have announced an agreement under which SoftBank commits to provide significant funding to the company, the companies said.
This includes USD 5 billion in new financing and the launching of a tender offer by SoftBank of up to USD 3 billion for existing shareholders. Additionally, SoftBank will be accelerating an existing commitment to fund USD 1.5 billion. The funding provides WeWork with significant liquidity to execute its business plan to accelerate the company´s path to profitability and positive free cash flow.
After closing, and following the tender offer, SoftBank´s fully diluted economic ownership of WeWork will be approximately 80 percent. Since SoftBank will not hold a majority of voting rights at any general stockholder meeting or board of directors (“Board”) meeting and does not control the company, WeWork will not be a subsidiary of SoftBank. WeWork will be an associate of SoftBank.
In connection with the agreement, WeWork´s Board will appoint Marcelo Claure, Chief Operating Officer of SoftBank Group Corp., to the position of Executive Chairman of the board of directors of WeWork, effective upon closing of the accelerated USD 1.5 billion payment commitment. Adam Neumann, the founder of the company, will become a Board observer. The size of the Board will be expanded and it will receive voting control over Neumann´s shares.
The Raine Group LLC is serving as lead financial advisor and Weil, Gotshal & Manges LLP and Morrison Foerster LLP are serving as legal advisor to SoftBank. Lazard Ltd. and Houlihan Lokey, Inc. are serving as financial advisors and Weil, Gotshal & Manges LLP is serving as legal advisor to the SoftBank Vision Fund.
Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal advisor to WeWork. Perella Weinberg Partners LP is serving as financial advisor and Wilson Sonsini Goodrich & Rosati is serving as legal advisor to the Special Committee of the WeWork Board. Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as legal advisor to Neumann.
The SoftBank Group is a global technology player that aspires to drive the Information Revolution. To learn more, visit https://group.softbank/en/.
WeWork provides members around the world with space, community, and services through both physical and virtual offerings. Its mission is to create a world where people work to make a life, not just a living. As of Q2 2019, WeWork had 528 locations in over 111 cities and 29 countries.