Adam Neumann Will Lose His WeWork's Shares
SoftBank won approval from WeWork’s board to take control of the troubled co-working startup, in a deal that would hand co-founder Adam Neumann nearly $1.7 billion and sever most of his ties with the company. WeWork, in danger of running out of cash in the coming weeks, chose a rescue offer from SoftBank over a competing proposal from JPMorgan Chase.
As part of the deal, SoftBank, which already owns about a third of the company, is to buy nearly $1 billion of stock in WeWork’s parent from Neumann, who was forced out as chief executive after pushback from prospective investors scuttled the IPO. The Japanese conglomerate will also extend him roughly $500 million in credit to help repay a loan facility of the same amount led by JPMorgan, and also pay Neumann a $185 million consulting fee.
Adam Neumann once had a block of shares in WeWork that gave him as much as 20 votes per share. As part of this deal, all We stock now will have the same voting power. Neumann’s stake in the company is expected to fall to below 10% after he sells shares.