TOKYO (AFP) – SoftBank announced yesterday it will pump billions of dollars into struggling office-sharing start-up WeWork, in a deal that will see co-founder Adam Neumann taking a huge payout and exiting the board.
The package, which involves new financing, speeds up already pledged money and includes a new tender offer for existing shareholders, is worth a total of USD9.5 billion.
Neumann, who has already been forced to step down as chief executive, will exit the board for an “observer” role, but is said to be receiving more than USD1.5 billion as he departs. SoftBank Group’s Marcelo Claure will take over as executive chairman of the board.
The agreement caps a turbulent period for the once-vaunted start-up, which was valued by some at around USD47 billion at the start of the year, and represents a significant shot in the arm as the company haemorrhages money.
“SoftBank has decided to double down on the company by providing a significant capital infusion and operational support,” SoftBank Chairman Masayoshi Son said in a statement.