WeWork committee pushes back against SoftBank, asserts right to represent shareholders

WeWork at Shoreditch, London. Photo by Uygar Kilic on Unsplash

A special committee of WeWork board members on Monday rejected an assertion by SoftBank Group Corp that it does not have authority to represent the interests of minority shareholders of the office-sharing startup.

The committee had negotiated a $3 billion tender offer which was part of a $9.6 billion rescue financing package SoftBank had agreed with WeWork in October that gave it control of the company.

Since then, the office space-sharing start-up’s occupancy rates have plummeted, as customers in big cities stay at home to prevent the spread of the coronavirus.

SoftBank earlier this month said it would not press ahead with the tender offer because several pre-conditions had not been met, frustrating WeWork‘s minority shareholders, who were expecting a payout. The investors included co-founder and former Chief Executive Officer Adam Neumann.

An independent two-member special committee of WeWork had filed a lawsuit, calling SoftBank’s decision to terminate the tender offer wrongful.

“SoftBank’s ploy attempts to prevent the more than 850 current and former WeWork employees who tendered stock worth over $450 million from obtaining any remedy for SoftBank’s wrongful conduct,” the committee said in a statement.

The committee comprises Bruce Dunlevie, who is a general partner at WeWork shareholder Benchmark Capital, and Lew Frankfort, former CEO of luxury handbag maker Coach.

“The present complaint reflects an effort by two directors to use WeWork‘s resources to pursue a lawsuit designed to create a personal benefit for the directors who brought it. That is improper,” a spokeswoman for SoftBank said.

SoftBank has so far invested more than $13.5 billion in WeWork. In two previous tender offers in 2017 and 2019, WeWork shareholders and employees had received a total of $2.3 billion from SoftBank.

But the conglomerate has been under growing financial strain, with souring tech bets bringing it under pressure from activist investor Elliott Management and pushing it into a radical pledge to raise $41 billion by selling down core assets for share buybacks and to reduce debt.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.