SoftBank to take control of WeWork at less than $8B valuation

Marco Green
October 22, 2019

Japan-based SoftBank is ready to buy a controlling stake in WeWork, providing the shared office space startup desperately needed funding at a slashed valuation, a source told AFP on Monday.

Softbank is ready to invest an additional US$4 billion to US$5 billion in WeWork, taking a majority stake in the NY company while valuing it at US$8 billion overall, the source said, asking not to be identified.

As part of the agreement, the Japanese conglomerate will issue $5 billion in debt and a $1.5 billion tender offer.

Representatives for WeWork and SoftBank did not immediately return Yahoo Finance's request for comment.

With the office-sharing company almost out of cash, CNBC reported on Monday that the investment vehicle led by Japanese billionaire Masayoshi Son will shell out between $4 billion and $5 billion in fresh funding, sources told the outlet.

SoftBank's bailout offer comes as WeWork prepares to lay off thousands to curb cash bleeding after an aborted attempt by parent We Co.to hold an initial public offering this fall.

The proposal, which could pump nearly $10 billion into WeWork, would give SoftBank a chance to overhaul the struggling startup's governance and operations. But public investors spurned the company, which lost US$900 million in the first half of this year. The company has said it is looking to offload several of the companies it recently acquired, plans to shutter the elementary school located in its corporate headquarters in NY and even put its $60 million corporate jet up for sale.

The deal could give WeWork a reprieve as it scrambles to cut costs.

Other reports by Click Lancashire

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