WeWork Cos. Inc. shareholder SoftBank Group Corp. is in late-stage discussions to take control of the coworking giant in a deal that will value WeWork between $7.5 billion and $8 billion on a pre-funding basis, CNBC reported, citing people with knowledge of the matter.
SoftBank aims to invest up to $5 billion in new funding and existing shares, and a deal could be announced as soon as Oct. 22, the unnamed sources told the news outlet.
The Japanese lender will make up to a $3 billion tender offer, along with a $1.5 billion acceleration of equity it has already committed and $5 billion in syndicated debt, two sources familiar with the matter told the news outlet.
SoftBank COO Marcelo Claure will be involved in The We Co. unit's management, likely as chairman, while former CEO Adam Neumann's stake in the company will decrease to low double digits, the report added.
Separately, Reuters reported, citing unnamed sources, that as part of the deal with SoftBank, Neumann could resign from The We Co.'s board and become an adviser, with Claure to succeed him as chairman.
The report added that WeWork, which is considering potential alternative $5 billion bailout packages from JPMorgan Chase & Co. and SoftBank, has lined up Mizuho Financial Group Inc. as part of its syndication of the $5 billion debt package, which consists of letters of credit for more than $1 billion, as well as senior secured and subordinated bonds.
Reuters could not get a comment on the matter from WeWork, SoftBank, JPMorgan or Mizuho.
The We Co., which recently postponed its IPO, is reportedly in need of a bailout package, as it risks running out of cash as early as November.