Internet and telecommunications group SoftBank has withdrawn from a planned $3bn purchase of shares in US-based workspace provider WeWork.
The tender offer had formed part of a $9.5bn financing package SoftBank pledged to the company in October 2019 after it had failed to go public in a planned initial public offering.
WeWork operates a network of more than 500 shared workspaces worldwide but has been one of the companies hit hardest by the Covid-19 pandemic which has spurred millions to work at home.
SoftBank had been set to buy shares in the company from shareholders including founder and former CEO Adam Neumann and early investors such as venture capital firm Benchmark, hut claimed WeWork had not met conditions attached to the agreement, including the roll-up of joint ventures in Asia.
Rob Townsend, chief legal officer of SoftBank, said in a statement released today: “Given our fiduciary duty to our shareholders, it would be irresponsible of SoftBank to ignore the fact that the conditions were not satisfied and to nevertheless consummate the tender offer.”
A key factor in the deal is that it had been attached to $1.1bn in debt financing SoftBank was set to provide in order to help WeWork keep running while it restructures its business.
WeWork has meanwhile been selling off assets, divesting business management software provider Teem, its stake in private members organisation The Wing and, this week, social event management platform Meetup, which was bought by a consortium led by AlleyCorp.
SoftBank confirmed in the statement that, together with its Vision Fund, it has so far supplied a total of more than $14.2bn in debt and equity financing to WeWork.
Hotel chain Jin Jiang International and Legend Capital, the VC firm formed by conglomerate Legend Holdings, are among WeWork’s earlier investors, having joined private equity firm Hony Capital in a $690m series F round in 2016 to take its total funding to $1.7bn.
Financial services and investment group Fidelity was an earlier backer along with Benchmark, Goldman Sachs, JP Morgan Investment Management, T. Rowe Price and clients of Wellington Management.
Photo courtesy of WeWork Companies Inc.
