The inevitable has come to pass – major WeWork shareholder SoftBank has gone ahead with a roughly $10bn deal to take control of WeWork and oust co-founder and CEO Adam Neumann. The deal is fairly complicated, involving share buybacks, a debt facility, an equity investment, and a new loan. All in all, it equates to a package that will give SoftBank majority ownership of the floundering short-term office leasing business.
It marks quite a fall for WeWork, which was hoping for a shoot-the-lights-out IPO just a few months ago, but the deal will at least keep the lights on – WeWork was facing a cash crunch as its access to capital shrivelled in the wake of its failed public offering. Perhaps with Neumann gone, a pair of new co-CEOs, this juicy cash injection, and a little bit of luck, WeWork could one day become as profitable and successful as its major competitor, IWG.
Alec Hogg is in the UK this week – that’s why he isn’t writing his daily newsletter right now – but perhaps when he’s back, I’ll ask him if he returned to his former haunt at WeWork in downtown London. He may be able to give us a taste of events on the ground.
