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Japan's SoftBank ends WeWork tender, remains behind bailout
Published Thursday, April 2, 2020 3:54AM EDT
A SoftBank shop in Tokyo is pictured in this April 9, 2019, photo. (AP Photo/Shuji Kajiyama)
TOKYO -- Japanese technology company SoftBank Group Corp. called off its offering of up to US$3 billion worth of shares in office-space rental venture WeWork, though it remains committed to its $5 billion bailout of the financially troubled company.
The main loser in the offer's failure is WeWork founder Adam Neumann, who quit the company last year, but owns about half the shares that were up for offer, according to SoftBank.
The company said Thursday that the option not to close the offer was part of the initial deal if certain conditions were not met by an April 1 deadline.
Such conditions include the release of financial and operational information from U.S. criminal and civil investigations related to Neumann, according to SoftBank.
The required anti-trust approvals have not been obtained, and restrictions on WeWork due to government efforts to halt the spread of the coronavirus pandemic were other factors, it said.
SoftBank said its bailout of WeWork, announced late last year, would go ahead.
Views on WeWork's potential vary. Detractors say it's just a glorified real estate company. Backers say WeWork spaces are attractive because they are equipped with the latest net and other technology features and offer opportunities for personal networking.
SoftBank and its Vision Fund, which gathers investment money, has promised to invest more than $14 billion in WeWork, including the latest bailout money.
SoftBank Senior Vice-President Robert Townsend said the tender offer's closure will not affect WeWork's operations or its overall strategic plan.
WeWork has been trying to turn itself around over the past half year and has installed new managers. SoftBank Chief Executive Masayoshi Son has repeatedly expressed his belief in its potential.