SoftBank wants to reduce WeWork rescue package

Co-working giant is also facing multiple investigations into its financial practices

Nov.November 22, 2019 10:00 AM
Softbank CEO Masayoshi Son (Credit: Getty Images)

Softbank CEO Masayoshi Son (Credit: Getty Images)

SoftBank is looking to whittle down its WeWork rescue package.

The $9.5 billion agreement has drawn ire from WeWork employees because of a generous payout to founder and former CEO Adam Neumann, according to Bloomberg.

SoftBank has already provided a $1.5 billion investment to the struggling co-working giant, which abandoned IPO plans in September. But as The Real Deal reported last week, Masayoshi Son’s company has delayed a $3 billion tender offer to WeWork.

The rescue package — which values WeWork at $8 billion — staved off a bankruptcy this month. But any change to the agreement, which would allow former CEO Adam Neumann to sell $970 million worth of WeWork stock to SoftBank, could result in a legal battle, a source told Bloomberg.

Potential revisions to the rescue package come as WeWork announced 2,400 staff layoffs. The company is also facing investigations into its financial practices from the U.S. Securities and Exchange Commission, and the New York Attorney General’s Office.

Meanwhile, SoftBank is reportedly raising funds for the rescue package, and is negotiating to receive as much as 300 billion yen, or $2.8 billion, from Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group. [Bloomberg] — Georgia Kromrei

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