SoftBank Seeking To Acquire Majority Stake In WeWork
SoftBank Group has proposed a financial deal that would give it majority control of WeWork in exchange for providing much needed cash to the company.
WeWork has been dealing with financial difficulties ever since the company pulled its plan to roll out an initial public offering. Investors pulled out because of the company’s increasing costs and consistently increasing losses. In an effort to keep WeWork in operation, its former CEO and founder, Adam Neumann resigned earlier this year.
“WeWork has retained a major Wall Street financial institution to arrange a financing. Approximately 60 financing sources have signed confidentiality agreements and are meeting with the company’s management and its bankers over the course of this past week and this coming week,” a company spokesman said.
With the proposed deal from SoftBank, Neumann would lose his voting power. SoftBank has already sent representatives to work with WeWork’s new CEOs to devise a plan towards financial profitability.
WeWork was initially valued at $47 billion by SoftBank but is now valued at under $20 billion. At the moment, WeWork would need $3 billion in order to remain operational for the next 12 months. Currently SoftBank already owns 1/3rd of WeWork.