SoftBank may not complete $3 billion tender offer for WeWork, sources say

Japan’s SoftBank Group CEO Masayoshi Son delivers a speech during a press briefing on the company’s financial results in Tokyo on November 6, 2019.

Kazuhiro Nogi | AFP | Getty Images

SoftBank may be walking away from part of its bailout of WeWork by not completing its $3 billion tender offer for the office space startup, according to people familiar with matter.

SoftBank had planned a $3 billion tender offer for WeWork shares, which were privately held, along with a $1.5 billion acceleration of equity it has already committed and $5 billion in syndicated debt. The financing package was meant to save WeWork from an impending cash crunch last year.

SoftBank still plans to extend $5 billion in debt to WeWork, the people said, who asked not to be named because the discussions are private.

The Wall Street Journal previously reported on SoftBank’s attempt at revising terms of the bailout.

The SoftBank tender offer closes April 1. As part of the tender, SoftBank had also planned on doing a share swap for WeWork’s joint ventures, which were supposed to close April 1 and haven’t yet — a potential out for SoftBank, one of the people said. The Japanese technology company sent a letter to WeWork shareholders Tuesday saying it may not complete the tender offer, citing potential probes from the Securities and Exchange Commission and the Justice Department and as one of the reasons for being able to walk away, the Journal reported.

SoftBank’s bailout package of WeWork in October valued the startup at about $8 billion — a far cry from the $47 billion SoftBank valued WeWork at in January 2019. SoftBank founder and CEO Masayoshi Son has publicly said trusting WeWork founder Adam Neumann with more than $10 billion in funding money was a mistake. Son lost faith in Neumann in September and helped force his ouster as CEO, and the company suspended its plans to go public.

WeWork’s near-term outlook is fraught as global quarantines rock commercial real estate companies like WeWork. Office spaces will be virtually empty, potentially for months, in countries around the world as people work from home. 

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