In addition to the takeover offer from SoftBank, WeWorkâ€™s board had also been considering a $5 billion debt financing offer from JPMorgan Chase.
The SoftBank deal will mean a huge payout for Adam Neumann, WeWorkâ€™s co-founder who stepped down as chief executive last month. Under Mr. Neumann, the company grew at a breakneck pace, drawing ardent backers like SoftBankâ€™s chief executive, Masayoshi Son, and making Mr. Neumann wealthy.
But prospective investors for the companyâ€™s initial offering were skeptical of his leadership, and existing WeWork backers â€” including SoftBank â€” pushed for his ouster.
Yet Mr. Neumann will receive roughly $1.7 billion in consideration as part of the SoftBank deal, according to the people with knowledge of the offer. The Tokyo-based technology giant will buy roughly $1 billion worth of WeWork shares from him, and give him about $500 million worth of financing to repay a credit line from JPMorgan. Mr. Neumann also will receive a $185 million consulting fee.
In exchange, he will back the SoftBank deal and step down from WeWorkâ€™s board.
As part of the agreement, SoftBank will accelerate a $1.5 billion investment in WeWork that it had planned to make next year, and it will help assemble a $5 billion loan from a consortium of financial institutions, including itself.
Article source: https://www.nytimes.com/2019/10/22/business/dealbook/wework-softbank.html?emc=rss&partner=rss