Wework threatens to sue Softbank over ditched $3bn share buyout
Wework has threatened to sue Softbank after the Japanese investment giant abandoned plans to buy $3bn (£2.4bn) worth of additional shares in the company.
Softbank, which owns a controlling stake in the coworking firm, agreed to the share tender last year as part of a rescue package following Wework’s botched public listing.
The company said it was pulling out of the agreement “certain conditions” were not satisfied.
“The termination of the tender offer will have no impact on Wework’s operations, customers, five-year business and strategic plan, or the vast majority of Wework’s current employees,” it added.
But a committee of Wework’s board said it was “disappointed” in the decision, adding it would evaluate all its legal options including litigation.
It follows reports of a growing rift between Wework and its major shareholder, with the committee stating it was gearing up for a fight with the Japanese conglomerate.
Softbank listed a number of reasons why it believed the conditions of the tender offer were not met, including failure to obtain required antitrust approvals, new criminal and civil investigations into Wework and the outbreak of coronavirus.
The u-turn will come as a blow to Wework founder Adam Neumann, who was ousted as part of the rescue package. Softbank had agreed to buy shares from Neumann worth almost $1bn.
Softbank’s chief legal officer Rob Townsend said the company remained “fully committed” to Wework.
Softbank has ploughed more than $10bn into the troubled coworking firm, which shelved plans to float last year due to a lack of investor interest and a plummeting valuation.
Wework has also announced plans to cut 4,000 jobs and has sold off a number of fringe businesses amid a radical turnaround plan.