Adam Neumann, the flamboyant co-founder of WeWork, and SoftBank, the Japanese conglomerate that rescued the co-working company in 2019, have in current weeks made vital headway towards settling their drawn-out legal dispute, based on two people with data of the matter. That battle has stalled SoftBank’s efforts to take WeWork public.
As part of its multibillion-dollar bailout of WeWork, SoftBank offered to pay $3 billion for stock owned by Mr. Neumann and other shareholders. A number of months later, after the coronavirus pandemic had emptied WeWork’s areas, SoftBank withdrew the offer. Mr. Neumann then sued SoftBank for breach of contract.
SoftBank was already a giant investor in WeWork when it withdrew plans for an preliminary public providing in 2019. Now, SoftBank has plans to mix WeWork with a publicly traded special-purpose acquisition company, a type of deal that has lately develop into a well-liked way of rapidly bringing private companies public. The legal dispute between Mr. Neumann and SoftBank is a risk to such a deal as a result of it leaves unresolved the question of how a lot control SoftBank has over WeWork.
The settlement talks, which have been reported earlier by The Wall Street Journal, may nonetheless disintegrate, the 2 people said. Under the terms being mentioned, SoftBank would buy half the number of shares that it had initially agreed to, one of many people said. As a result, it might pay $1.5 billion, not $3 billion. Mr. Neumann would get almost $500 million as a substitute of just about $1 billion, however he would retain more of his shares.
Under Mr. Neumann, WeWork grew at a breakneck tempo and was utilizing up a lot money that it was near chapter earlier than SoftBank stepped in. Under the management team SoftBank put in, WeWork has tried to cut prices by slowing its growth and negotiating offers with the landlords it rents space from.