SoftBank has walked away from buying $3bn (£2.4bn) of WeWork stock.
Source: Shutterstock/Mitch Hutchinson
The planned purchase was part of the multi-billion rescue package it agreed with the business last year.
The Japanese conglomerate last month warned that it might make a U-turn on buying the shares in light of an ongoing investigation by the US government into WeWork.
The payment for the shares had a 1 April closing date and would have gone to the selling shareholders. Almost $1bn of that would have gone to WeWork founder and former chief executive Adam Neumann.
In a statement this morning SoftBank senior vice president and chief legal officer Rob Townsend said the business remained “fully committed to the success of WeWork”.
“The tender offer was an offer to buy shares directly from other major stockholders and its termination has no impact on WeWork’s operations or customers. The tender offer closing was conditioned on the satisfaction of certain closing conditions the parties agreed to in October of last year for SoftBank’s protection. Several of those conditions were not met, leaving SoftBank no choice but to terminate the tender offer,” he said.
SoftBank listed a number of unfulfilled conditions of the deal including failure to roll up WeWork’s Chinese joint venture, failure to obtain anti-trust approvals and the existance of multiple criminal and civil legal proceedings.
A member of a special committee from WeWork’s board of directors told Reuters that it was “surprised and disappointed” that the tender offer had been retracted and added that it would “evaluate all of its legal options, including litigation”.
The news came as Bloomberg reported the flexible office provider was seeking 30% rent cuts with landlords across the globe in response to the coronavirus pandemic, which has left its offices virtually empty in recent weeks.