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Troubled office space provider WeWork accepts SoftBank’s $10bn rescue bid

By Philip Smith

Controversial chairman Adam Neumann expected to leave US office-sharing company once valued at $47bn

WeWork has accepted a $10bn (£7.7bn, €9bn) offer from its biggest investor, Japanese telecoms conglomerate SoftBank, according to a source reported in the New York Times.

The deal, still to be confirmed, will almost certainly lead to the departure of its chairman and co-founder, Adam Neumann.

Neumann, who is set to receive about $200m in return for giving up the chairmanship, backed the plan which will see SoftBank’s COO, Marcelo Claure, take over as chairman. SoftBank is expected to own between 60 per cent and 80 per cent of the re-financed firm.

The board today had to decide whether to accept this offer or a rival bid from JP Morgan Chase, worth $5bn, which includes $2bn of unsecured debt. The company was on course to run out of funding next month.

Earlier this year WeWork, which rents out office space, was valued at as much as $47bn. It has lost nearly $39 billion of its valuation over the past few weeks.

The news will be welcomed by WeWork’s staff who were told last week to expect 2,000 job losses as a result of the finding crisis.

Last month WeWork abandoned its planned IPO after investors questioned its large losses, the sustainability of its business model and the company's governance.

Neumann held special voting shares that enabled him to dismiss dissident directors. This sparked concern among investors ahead of the flotation. Neumann has also taken $700 million out of the company through personal loans and stock sales.

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