Whether SoftBank’s nearly $10 billion rescue package is enough for The We Company to build a profitable foundation won’t be apparent for some time. But investors can ensure Adam Neumann is the last founder able to run amok, writes AntonyMCurrie.
SoftBank has struck an agreement to take control of WeWork parent The We Company, the Wall Street Journal reported on Oct. 22.
As part of the deal, SoftBank will buy $1 billion of equity from founder and recently ousted Chief Executive Adam Neumann, as well as lend him $500 million and pay him $185 million, characterized as a consulting fee. Neumann is also expected to step down from the board, the Journal said. In addition, the Japanese group will buy up to another $2 billion of stock from employees and investors. The transaction values WeWork at some $8 billion, compared with $47 billion in a funding round in January in which SoftBank participated.
SoftBank will also accelerate an earlier $1.5 billion equity commitment, on renegotiated terms, and the agreement also involves providing WeWork with $5 billion of debt.
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