Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Business https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Neumann agrees to a 50% discount on SoftBank’s settlement through WeWork

Neumann agrees to a 50% discount on SoftBank’s settlement through WeWork

Adam Neumann has agreed to a 50 percent pay cut, which he will receive from WeWork SoftBank’s largest investor, ending the lawsuit and paving the way for the public shared office provider.

SoftBank said Friday it has struck a deal with Neumann and two directors on the WeWork board who have sued SoftBank over the Japanese group’s reluctance to fulfill a $ 3 billion offer promised as part of a rescue package for the company.

The deal comes 18 months after a failed initial public offering that brought WeWork to the brink of bankruptcy, following a series of high-profile blunders that led to Neumann̵

7;s resignation as CEO.

Under the terms of the deal, SoftBank will spend $ 1.5 billion to buy shares from Neumann, WeWork employees and other investors in the company, including the risk group Benchmark Capital, according to people familiar with the matter. Neumann could sell up to $ 500 million worth of shares in the deal.

SoftBank originally planned to buy double that amount as part of a multibillion-dollar bailout package in October 2019, but later declined the offer, claiming that WeWork had not met a set of conditions behind the bailout.

Marcelo Claur, WeWork’s chief executive, said the agreement was “the result of all the parties coming to the table in the name of what does the best for WeWork’s future”.

Settling the dispute with Neumann is crucial in allowing WeWork to merge potentially with a vacant check company that will allow it to trade in public markets, said a person with direct knowledge of the issue.

SoftBank is currently in talks with BowX Acquisition, a special-purpose acquisition that raised $ 420 million in an IPO in August, over a merger that could value WeWork between $ 8 billion and $ 10 billion, insiders said.

Negotiations have been active for several weeks and a deal could be announced soon, although one negotiator said WeWork could still choose to go public through a traditional IPO or direct involvement.

The new estimate will be far from the $ 47 billion price WeWork achieved in the range of funding it secured before the company faced criticism from investors for its huge losses, management, and revelations that Neumann personally benefited. from a series of deals.

Neumann will have no role in the management of WeWork, nor will he have a place on the company’s board of directors, said people briefly acquainted with the agreement. However, he will retain most of his stake in the company.

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