The special committee of WeWork‘s board said it is suing SoftBank after the investment giant withdrew its US$3 billion tender offer for the embattled startup.
Photo credit: WeWork
In a lawsuit filed yesterday, the co-working firm said SoftBank has breached its obligations under their agreement by failing to deliver on their deal. WeWork now wants the Japanese conglomerate to complete the tender offer or pay compensatory damages.
SoftBank’s offer to buy shares of WeWork was part of a US$9.5 billion bailout package that came after an unsuccessful attempt at going public set WeWork on a downhill path. It also includes a US$1.5 billion injection from SoftBank and US$5 billion in debt financing.
Last week, SoftBank said it will not be moving forward with the deal due to regulatory probes and unment requirements.
“The special committee regrets the fact that SoftBank continues to put its own interests ahead of those of WeWork’s minority stockholders,” WeWork’s camp said. “Instead of abiding by its contractual obligations, SoftBank, under increasing pressure from activist investors, has engaged in a purposeful campaign to avoid completion of the tender offer.”
According to WeWork, SoftBank has already received most of the benefits provided under the initial tender offer agreement, including board control over the startup and “additional economic benefits.”
The company also claims that the Masayoshi Son-led firm purposefully pursued a separate transaction with minority investors in WeWork’s joint venture in China to make sure the tender offer would not go through, as it is one of the conditions to closing the deal.
Less than three weeks ago, SoftBank said that it “continues to honor its obligations” under the agreement.
Editing by Charmaine de Lazo
(And yes, we’re serious about ethics and transparency. More information here.)
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