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The abandoned WeWork co-founder may get $500 million from the Spac deal



Adam Neumann (Adam Neumann) can obtain nearly 500 million US dollars in cash from the WeWork he holds, and appear as a public company. Less than 18 months later, the initial public offering (IPO) is eye-catching His failure made him the CEO.

People familiar with the matter said that SoftBank is in advanced negotiations with WeWork’s co-founders and other shareholders to resolve a fierce legal battle triggered by the Japanese group’s rescue of the office group in October 2019. Say with negotiation.

The lawsuit filed by Neumann and the special committee of independent directors of the group cleared the way for a special-purpose acquisition company to acquire WeWork, allowing WeWork to try in 201

9 and failed to obtain a public listing.

People familiar with the matter said BowX Acquisition is a blank check tool that raised $420 million in the August IPO. The company has approached SoftBank, WeWork’s largest shareholder, and the deal may make WeWork worth about $10 billion.

US$47 billion

Before the failed IPO, SoftBank put a price tag on WeWork in the last round of private financing

Negotiations between the two countries are still going on. Although negotiations may still break down, an agreement may be reached in the coming weeks. Given that newly listed companies must attract investors to buy their shares, resolving legal disputes with Neumann and others is seen as the key to completing the merger with BowX.

The proposed valuation will be much lower than the $47 billion that SoftBank provided to the company in the last round of private equity financing before the failed IPO, which Neumann and his Wall Street bankers had hoped would reach or exceed This level.

But this will represent an unexpected rebound in Neumann’s wealth. The recognition of this business model seems to be hindered when the empty office of the Covid-19 pandemic appears to be vacated, and once again shows how the Spac boom has changed the capital market.

It is said that SoftBank has approached Neumann and the Special Committee in the past two weeks, proposing to resolve their dispute over the $3 billion tender offer as part of its October 2019 bailout. The Japanese group withdrew from the agreement to buy shares from Neumann and other investors, saying the trading conditions had not been met.

In an earlier trial, after the Special Committee and Neumann have the right to file a lawsuit against SoftBank, the two parties will offer a confrontation in court next week.

The settlement agreement under discussion will result in SoftBank paying $1.5 billion to Neumann and other investors including Benchmark Capital, accounting for half of the disputed amount. Neumann will receive approximately $480 million for his 25% stake, instead of twice the 50% he could have bid for. He will also retain three-quarters of his current shares in listed companies.

Since last year, WeWork’s fate has changed dramatically, so WeWork has laid off employees and withdrew from more than 100 open and planned locations. Under the leadership of CEO Sandeep Mathrani, although the company continues to lose money, it has greatly reduced costs.

Negotiations continue, and the exact amount Neumann and others received may change.

BowX is led by two former Tibco Software executives, Vivek Ranadivé and Murray Rode, and is supported by Bowana, a venture capital fund established by Ranadivé with the support of the University of California. In its listing documents last year, it expressed its intention to conduct investigations on telecommunications, media and technology companies.

Ranadiff also owns the Sacramento Kings basketball team.

The Wall Street Journal earlier reported on the settlement negotiations.


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