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People walk out of the co-working space WeWork in the Williamsburg neighborhood of Brooklyn in New York.
Spencer Platt | Getty Images
This is a developing story. Check back for updates.
Softbank will take control of embattled company WeWork, according to people familiar with the matter.
Softbank, led by Japanese billionaire Masayoshi Son, plans to spend somewhere between $4 billion and $5 billion on new equity, existing shares, sources say. The deal will value WeWork between $7.5 billion to $8 billion and could be announced as soon as Tuesday.
Softbank exec Marcelo Claure will be involved in the company’s management, while former CEO Adam Neumann’s stake will fall to low double digits.
WeWork rents out work spaces to start-ups and other businesses and was founded in 2010 by Neumann. But what was anticipated to be one of Wall Street’s hottest initial public offerings of the year has seen a marked reversal.
Last month, the start-up terminated plans to go public. Its much-anticipated IPO prospectus in August revealed a huge $900 million loss in the first six months of 2019 and drew worries over its corporate governance practices.
There has also been a showdown between former CEO Adam Neumann and SoftBank‘s Son, who has invested billions into the start-up. Neumann stepped down last month. It was also reported that SoftBank has readied a financing package to take control of the company and further sideline Neumann, who is also a co-founder.
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