[ad_1]
Adam Neumann could raise nearly $ 500 million in cash from his WeWork stakes and emerge with a stake in a public company, less than 18 months after the much-publicized failure of his IPO cost him his post as CEO .
SoftBank is in advanced talks with the co-founder of WeWork and other shareholders to settle a bitter legal battle stemming from the Japanese group’s rescue of the office group in October 2019, which was necessary to help it avoid bankruptcy at following the collapse of the IPO, people familiar with the negotiations said.
The settlement of the litigation brought by Neumann and a special committee of independent directors of the group would pave the way for the takeover of WeWork by a special purpose acquisition company, giving it the public listing that it attempted and did not. managed to get in 2019.
People familiar with the matter said BowX Acquisition, a blank check vehicle that raised $ 420 million in an August IPO, approached SoftBank, WeWork’s largest shareholder, about a deal that could value WeWork at around $ 10 billion.
$ 47 billion
The price SoftBank put on WeWork in its last private financing round before the IPO failed
Talks between the two groups are continuing and a deal could be reached in the coming weeks, although negotiations could still collapse. Resolving the legal dispute with Neumann and others was seen as key to completing a merger with BowX, given that the new public company must attract investors to its shares.
The mocked valuation would be far below the $ 47 billion price SoftBank imposed on the company in its last private funding round before the failed IPO, which Neumann and his Wall Street bankers once hoped to match. or eclipse this level.
But it would represent an unexpected rebound in Neumann’s fortunes, an endorsement of a business model that appeared to be in jeopardy when the Covid-19 pandemic emptied offices and another indication of how the Spac boom has transformed. financial markets.
SoftBank reportedly approached Neumann and the special committee over the past two weeks with a proposal to settle their dispute over a $ 3 billion takeover bid that was part of its October 2019 bailout. was withdrawn from the agreement to buy shares of Neumann and other investors, claiming that the terms of the deal had not been met.
Opposing parties were due to clash in court next week over the takeover bid after an earlier lawsuit gave the special committee and Neumann standing to bring their action against SoftBank.
The settlement under discussion would lead SoftBank to pay $ 1.5 billion – half of the amount in dispute – to Neumann and other investors, including Benchmark Capital. Neumann would receive around $ 480 million for 25% of his holdings, rather than double the 50% he could have bid. He would also keep three-quarters of his current holdings in the public company.
WeWork has downsized its staff and left more than 100 open and planned sites since its fortunes drastically changed last year. Under the leadership of CEO Sandeep Mathrani, the company has significantly reduced costs, although it continues to lose money.
Talks are continuing and the exact amount Neumann and others receive may change.
BowX is led by Vivek Ranadivé and Murray Rode, two former executives of Tibco Software and backed by Bow Capital, the Ranadivé venture capital fund founded with support from the University of California. Listing documents last year, he said he intended to research telecom, media and tech companies.
Ranadivé also owns the Sacramento Kings basketball team.
The Wall Street Journal previously reported on the settlement negotiations.
[ad_2]
Source link