A man enters the door of the WeWork Cooperative Space in Washington.
Mandel Ngan | AFP | Getty Images
SoftBank has entered into a deal to take control of WeWork, the co-op reported.
The company stated that the Japanese conglomerate would provide $ 5 billion in new financing and up to $ 3 billion in an offer to existing shareholders.
After completion and tendering, SoftBank's stake in WeWork will be approximately 80%.
SoftBank Chairman and CEO Masayoshi Son said in a statement, "SoftBank is a firm believer that the world is undergoing a massive transformation in the way people work. WeWork is at the forefront of this revolution."
The Japanese billionaire stated that WeWork's "growth challenges" were not "unusual for the world's leading technology disruptors." We remain committed to WeWork, its employees, member clients and landlords, "
SoftBank's Tokyo shares fell nearly 3% before the announcement.
As part of the deal, WeWork said it would appoint SoftBank's chief opera officer, Marcelo Claure Brand Officer, to executive chairman of its board of directors. Former WeWork CEO Adam Neumann will become a "board observer" as the company expands its board of directors and gains voice control over its shares, the company said.
The Wall Street Journal reported Tuesday that SoftBank will hand over $ 1
CNBC's David Faber first announced on Monday that SoftBank will spend between $ 4 and $ 5 billion on new capital and existing shares in WeWork's parent company, The We Co. The deal will estimate WeWork between $ 7.5 billion and $ 8 billion on pre-financing, which is part of the $ 47 billion private valuation assigned to it earlier.
Co-Chairs Arty Minson and Sebastian Gunningham replaced Adam Neumann in September after drawing their attention carefully because of their unusual leadership style and apparent conflict of interest. At the end of last month, WeWork withdrew its IPO, amid criticism from investors, rising losses and declining IPOs.
Since Neumann's departure, the new WeWork management has been working to get the company back on track for growth, including exploring the sale of several businesses. The company is expected to cut at least 2,000 people, or 13% of its staff, and more job cuts may be on the way, according to The Guardian.