SoftBanks Pulls $3 Billion Tender Offer for WeWork Shares

SoftBank announced this week that it has terminated its $3 billion tender offer for WeWork shares citing that closing conditions had not been met.

It was last month that the Wall Street Journal reported that SoftBank was using regulatory investigations as a way to back out of its commitment to buy $3 billion in shares from existing WeWork shareholders.

Under the terms of the share buyback deal which were negotiated last year, WeWork founder Adam Neumann had been set to receive almost $1 billion for his shares in the co-working company. The former CEO had already been forced out at that stage however.

SoftBank SVP and chief legal officer, Rob Townsend, wrote this week, “SoftBank remains fully committed to the success of WeWork and has taken significant steps to strengthen the company since October, including newly committed capital, the development of a new strategic plan for WeWork and the hiring of a new, world-class management team. The tender offer was an offer to buy shares directly from other major stockholders and its termination has no impact on WeWork’s operations or customers. The tender offer closing was conditioned on the satisfaction of certain closing conditions the parties agreed to in October of last year for SoftBank’s protection. Several of those conditions were not met, leaving SoftBank no choice but to terminate the tender offer.

SoftBank lists the unfulfilled conditions that have led it to terminate the offer as:

The failure to obtain the necessary antitrust approvals by April 1, 2020;
The failure to sign and close the roll up of the China joint venture by April 1, 2020;
The failure to close the roll up of the Asia (ex-China and ex-Japan) joint venture by April 1, 2020;
The existence of multiple, new, and significant pending criminal and civil investigations that have begun since the
MTA was signed in October 2019, in which authorities have requested information regarding, among other things,
WeWork’s financing activities, communications with investors, business dealings with Adam Neumann, operations, and
financial condition;
The existence of multiple new actions by governments around the world related to COVID-19, imposing restrictions
against WeWork and its operations.

Reuters has reported that a special committee of WeWork’s board said it was “disappointed” by the development and is considering “all of its legal options, including litigation.”