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Rescue Financing Hands WeWork Control to SoftBank
WeWork is reportedly accepting a financial rescue package that gives control of the company to SoftBank Group, its top investor. Citing sources said to be familiar with the agreement, Reuters reported Tuesday afternoon that SoftBank will provide $5 billion in new money to WeWork in the form of debt.
The coworking giant, once valued at $47 billion, chose SoftBank’s offer over an alternative $5-billion debt package submitted on Monday by JPMorgan, Reuters reported. SoftBank will also accelerate a previous $1.5-billion equity commitment to WeWork in the form of warrants that are due in April.
The Japanese conglomerate will additionally launch a tender offer for up to $3 billion to acquire WeWork shares from existing investors and employees. Former CEO Adam Neumann’s ability to tender his shares will be capped at $970 million. He currently owns a little over a fifth of WeWork, and is expected to retain a stake.
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