WeWork accepts multi-billion-dollar Softbank rescue deal

WeWork has been thrown a multi-billion-dollar lifeline from Softbank that will give the Japanese company more control of the troubled property start-up.

In a statement, Softbank said it would provide $5bn (£3.9bn) in new financing and up to $3bn for existing shareholders.

The deal will see Softbank increase its stake in the US office-space sharing start-up to roughly 80%.

Co-founder Adam Neumann will leave the board but retain “observer” status.

The deal marks the end of a tumultuous period for WeWork – once valued at nearly $50bn – that saw Mr Neumann step down as chief executive as questions over his leadership emerged.

The former boss is expected to be handed a sizeable payout. The Wall Street Journal reported the deal could see Mr Neumann receive nearly $1.7bn as he sells his shares in the company and through other fees.
Rescue deal

Under the agreement, Softbank will “accelerate” an existing commitment to fund $1.5bn, in addition to new financing and issuing a tender offer for existing shareholders.

The Japanese investment giant already owned about a third of WeWork.

“Softbank has decided to double down on the company by providing a significant capital infusion and operational support,” Softbank chairman Masayoshi Son said in a statement.

“SoftBank is a firm believer that the world is undergoing a massive transformation in the way people work,” he said.

Marcelo Claure will take over as executive chairman of the WeWork board.

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