Two people familiar with the matter said SoftBank group would this week launch a previous lying offer for up to $3 billion in WeWork shares, including $970 million held by WeWork co-founder Adam Neumann, according tomedia reports. The offer for founders, investors and employees holding shares was expected to start earlier this month, but was delayed after SoftBank sought a technical revision of the offer document, according to the sources.
The people said they would buy as soon as Monday at $19.19 a share under previously announced terms.
On Thursday, Bloomberg reported that SoftBank executives had been looking for ways to reduce the size of the offer, including limiting the amount paid to Neumann. Some SoftBank executives believe the payments to Neumann were too generous, the report said.
However, people familiar with the matter said there had been no discussion sifting the terms of the offer between WeWork and SoftBank, with one of the sources noting that the change sedited could put SoftBank in legal action against Neumann and others.
Spokesmen for SoftBank and WeWork declined to comment.
The proposal is a key part of SoftBank’s $9.5 billion WeWork bail-out agreement struck in October. SoftBank, which also provides $6.5bn in debt and equity financing, has been suffering huge losses and will soon run out of cash.
That paved the way for SoftBank to take control of about 80 per cent of WeWork as part of a deal with Neumann, who would relinquish voting control of the company and leave the board.
In addition to the money he will receive from selling his stock, SoftBank offered him a $500 million credit line to help him repay bank loans and $185 million in consulting fees. Of the $500 million in credit, Neumann has withdrawn about $400 million, according to the sources, under the terms of which Neumann is obliged to repay the credit from the proceeds of the offer.
WeWork said on Thursday it would cut about 2,400 jobs worldwide in a bid to slash costs and stabilize its business after a sharp fall from the market. As of June 30, the company had 12,500 employees, some of which work edges subsidiaries.
Since January, when WeWork was valued at $47bn and plans an initial public offering, WeWork has quickly become a cash-strapped company fighting for survival. It shelved its September 30 IPO plans as investors were wary of its growing losses, business model and corporate governance. Neumann resigned as chief executive last week.
Marcelo Claure, the new executive chairman of WeWork’s parent company, told WeWork employees last month that he “doesn’t know” how many shares Neumann will sell in the bid.
Mr Neumann owns more than 20 per cent of WeWork, but his real power comes from super-voting rights that give him control. He will no longer have super voting rights as part of a deal with SoftBank.
While the company fired employees, Neumann’s potential proceeds from the sale of shares led Senator Elizabeth Warren to tweet on Friday that “this is another example of a rigged system of corruption.” Warren is one of the contenders for the Democratic presidential nomination in 2020. A spokesman for Neumann declined to comment.