SoftBank in negotiations to acquire a majority stake in WeWork, a deficit group: source

SAN FRANCISCO / NEW YORK (Reuters) – Japan's SoftBank Group Corp.9984.T) is negotiating to acquire a majority stake in WeWork Cos, the US supplier of shared workspaces, could double on one of its biggest bets on a startup in decline.

Prices and other details need to be further clarified, the source added, adding that it was not a done deal.

A second source also said that SoftBank was under discussion for a major new investment in WeWork.

The Wall Street Journal previously announced that SoftBank's investment could be in the range of $ 15 billion to $ 20 billion and would likely come from the SoftBank Vision Fund. A smaller investment in SoftBank, under discussion at the beginning of the year, valued WeWork up to $ 40 billion, the Journal announced in June.

WeWork and SoftBank declined to comment. The sources spoke on condition of anonymity because the details of the interviews were private.

SoftBank and its Vision fund invested $ 4.4 billion in WeWork last year and the Japanese company has two board seats.

Some investors in Silicon Valley, who see the company as an overvalued real estate game and vulnerable to a slowing real estate market, have been skeptical about WeWork's prospects. In its first release of financial results in August, WeWork said its losses for the second quarter had increased.

SoftBank shares fell 5% in Wednesday afternoon's session in Tokyo. Some traders said the news of WeWork's investment potential was negative for SoftBank, which is heavily exposed to the tech sector whose stocks have been under pressure.

A majority stake in WeWork by SoftBank, which raised over $ 93 billion to create the technology-focused Vision Fund, would be a step back from its usual practice of taking minority stakes in start-ups in the development phase.

SoftBank has invested billions of dollars in Uber Technologies US user services company [UBER.UL] but only has a minority stake.

WeWork and the Japanese company are closely linked, with hundreds of SoftBank employees using the Japanese joint venture spaces of both companies and SoftBank considering moving their headquarters to WeWork's offices.

Other real estate investments in SoftBank include Compass, an online real estate marketplace, Katerra, a construction construction company, and the Indian hotel chain OYO Hotels.

SoftBank's CEO, Masayoshi Son, cites artificial intelligence as the common link between the companies in his portfolio and the technology that can drive vehicles, diagnose diseases and fuel financial services in the future.

WeWork's eight-year business is growing rapidly and second-quarter sales have more than doubled compared to the previous year. In September, he passed JPMorgan (JPM.N), the largest US bank, as the largest office tenant in Manhattan, highlighting the growing demand for flexible leases.

WeWork's Chinese unit raised $ 500 million in July from investors such as SoftBank, Hony Capital and Trustbridge Partners to support its expansion into the country.