SoftBank Group stated it has terminated a $3 billion tender offer for additional WeWork shares agreed in 2019 with shareholders, drawing threats of legal action and plunging the floundering office house company other into crisis.
The startup, which lost $1.25 billion in Q3, advised traders last week that it had $4.4 billion in cash and money commitments and would have the ability to weather the economic downturn.
The tender offer, which might have mostly benefited a select group of shareholders along with ousted co-founder Adam Neumann, had been agreed in October as part of the bailout plan by SoftBank after WeWork’s IPO plans flopped. Investors had been concerned about its losses and a business model that entails taking long-term leases and renting out spaces for the short term.
In November, sources stated the New York State Attorney General was investigating WeWork, inspecting whether Neumann, indulged in self-dealing to enrich himself. A spokesperson for Neumann declined to comment at the time.
SoftBank stated in its assertion that there have been “multiple, new, and important” pending criminal and civil investigations through which authorities have also requested information about WeWork’s financing operations and communications with investors.
Following the cancellation of the deal, SoftBank shares ended up 2.5%, outperforming a 1.4% drop for the broader Tokyo market