SoftBank may pour additional $1b in WeWork as part of deal negotiations, sources say

Japan’s SoftBank is in discussions to inject US$1 billion or more into WeWork, which would come on top of the US$1.5 billion it has already agreed to put in the co-working firm next year, The Financial Times reported citing people familiar with the matter.

Photo credit: Eloise Ambursley

The added investment comes as SoftBank looks to change the terms of a warrant agreement it had with WeWork, where the price per share at which it acquires WeWork stock will be reduced, according to the sources. As a result, SoftBank would potentially get a larger stake in the shared workspaces provider.

The deal renegotiation is just one of several options being considered by the Japanese conglomerate, and talks are still in the early stages, the sources said.

SoftBanks’ added investment could also open up additional financing options for WeWork. The co-working space operator is currently working on acquiring US$3 billion to US$4 billion in debt from a syndicate of banks, with the deal being contingent on it raising additional capital first, according to the report.

Both WeWork and SoftBank declined to comment on the matter.

Just yesterday, Adam Neumann stepped down as CEO of WeWork and took a non-executive board chairman role instead. The firm’s senior executives Sebastian Gunningham and Artie Minson were appointed as co-CEOs, with the two saying that they will be “evaluating the optimal timing for an IPO.”

It was reported that Neumann let go of his head chief role after receiving pressure from the company’s board as the firm looks to salvage its plan to go public – a move that has been met with scorn by its public investors.

WeWork parent The We Company aims to forge ahead with the IPO, but it would happen beyond the original October target date, according to people briefed on the matter.