- Shared-workspace company WeWork has agreed to merge with a SPAC, The Wall Street Journal reported Friday.
- It planned to merge with the BowX Acquisition Corp SPAC in a deal valuing it at $9 billion, sources said.
- The deal would take it public, two years after its failed IPO attempt, in which it sought a $47 billion valuation.
- See more stories on Insider’s business page.
WeWork is merging with a special-purpose acquisition company ( SPAC) in a deal that would value it at $9 billion including debt, The Wall Street Journal reported Friday, citing people close to the matter.
The merger with the BowX Acquisition SPAC would take the Softbank-owned WeWork public, two years after the shared-workspace company’s disastrous attempt to file an initial public offering (IPO) in 2019.
A SPAC is a company created solely to merge or acquire another business and take it public, making it a cheaper, faster alternative to an IPO, Insider’s Martin Daks reported.
The valuation is less than a quarter of the $47 billion valuation WeWork achieved in January 2019, thanks in part to a SoftBank investment in January 2019.
But its price tag plummeted more than 80% to below $5 billion by that September. The plunge reflected growing concerns about the company’s business model, the controversial behavior of CEO Adam Neumann, and lax corporate governance.
After WeWork’s IPO plans fell through, SoftBank agreed to purchase $3 billion in stock from investors and employees in a bailout package in October 2019.
But SoftBank walked away from the deal in April 2020. SoftBank in February of this year reached a proposed settlement with WeWork and Neumann, where it would buy around half of its original $3 billion stock purchase, the Wall Street Journal reported at the time.
Neumann stepped down as CEO in 2019 after the failed IPO, and sued SoftBank. Under WeWork and SoftBank’s proposals, Neumann would leave the company’s board, too, and be paid about $480 million for a quarter of his shares in the company, the WSJ reported.
This is a developing story.
Leave a Reply
Leave a Reply
This site uses Akismet to reduce spam. Learn how your comment data is processed.
