SoftBank Group Corp. has offered to take a majority stake in WeWork. Investment bank JPMorgan Chase & Co. has been preparing a separate financing package to present to the WeWork board. Reportedly, the bank has been pitching investors on a $5 billion junk-debt offering.
SoftBank, led by Japanese billionaire Masayoshi Son, plans to spend somewhere between $4 billion and $5 billion on new funding and existing shares, sources say. After the move, Softbank would then have as much as 70% or more control of WeWork.
The deal would value WeWork’s parent company, We Co., at about $8 billion or less – a tremendous fall from the $47 billion valuation WeWork secured from SoftBank in January. The company is expected to run out of money as soon as next month. It had been reported that WeWork estimated it could be valued at a little over $20 billion in a listing when they were preparing to take the company public, less than half the $47 billion valuation it achieved in a private fundraising round in January. WeWork had already lost $900 million in the first half of this year.
Prior to the takeover, SoftBank had already invested $10.65 billion in the space-sharing company. Last month, the start-up terminated plans to go public. Its much-anticipated IPO prospectus in August revealed a huge $900 million loss in the first six months of 2019 and drew worries over its corporate governance practices.
