WeWork demands completion of SoftBank’s $3b commitment

WeWork on Sunday said SoftBank should complete its US$3 billion tender offer, which the Japanese conglomerate promised to the office-sharing startup as part of a US$9.5 billion rescue package.

“The Special Committee of the WeWork Board of Directors remains committed to taking all necessary actions to ensure that the tender offer, which SoftBank has promised to our employees and shareholders, is completed,” the company said in an emailed statement.

Photo credit: Eloise Ambursley

WeWork’s response comes after reports last week said that SoftBank may walk away from the US$3 billion tender offer it committed to finance the embattled startup following its shelved IPO plans.

“Not only is SoftBank obligated to consummate the tender offer […] but its excuses for not trying to close are inappropriate and dishonest,” the company said.

It was reported that SoftBank might not repurchase shares from existing investors due to regulatory investigations into WeWork by the Securities and Exchange Commission and the Justice Department. SoftBank also said there was a delay in recapitalizing WeWork’s joint venture in China.

According to WeWork, SoftBank backing out from the agreement would be “completely unethical,” especially given the current environment with the Covid-19 crisis.

SoftBank emphasized that it “continues to honor its obligations” under the agreement, adding that “the tender offer has no impact on SoftBank’s commitment to WeWork or on the financial strength of the business.”

“SoftBank has informed stockholders that all of the agreed upon closing conditions must be satisfied before the tender offer can be completed,” the company said. “As of now, they are not.”

In October last year, the Japanese company promised WeWork a bailout program that includes US$5 billion in debt financing, a US$3 billion tender offer, and US$1.5 billion in investment. SoftBank is expected to own 80% of WeWork after the deal closes.