Japan's SoftBank Group Corp., the biggest investor in shared workspace real estate company WeWork, will buy out founder and CEO Adam Neumann for $1.7 billion and take control of the troubled company, the "Wall Street Journal" reports. The deal, which will cut most of Neumann's ties with WeWork, is at a company valuation of $8 billion, far below the $47 billion valuation that Neumann was seeking in a Wall Street IPO earlier this year.
Neumann will reportedly receive $1.7 billion in stock, cash and credit. The former kibbutznik and IDF officer has already taken $700 million out of the firm in cash and loans. Neumann, who cofounded the company in 2010, and developed an innovative concept of shared office space for tech companies wanting shorter term leases, was recently ousted as CEO, after reports of his unorthodox lifestyle and comments, and questionable corporate governance decisions.
SoftBank is still confident that despite WeWork's heavy losses, with leaner management and an investment of $10 billion, including a $5 billion loan, the company can become profitable and move ahead with its IPO.
WeWork offers many shared workspaces in Israel, and currently holds and operates office space in 10 properties in the country, most of them in Tel Aviv.
Published by Globes, Israel business news - en.globes.co.il - on October 22, 2019
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