WeWork agrees to go public via US$9b SPAC deal: WSJ

Bengaluru

WEWORK has agreed to go public through a merger with blank-cheque firm BowX Acquisition Corp that values the office-sharing startup at US$9 billion including debt, the Wall Street Journal reported on Friday, citing people familiar with the matter.

The company disclosed to prospective investors it had lost about US$3.2 billion last year as part of a pitch for a stock market listing by merging with a special purpose acquisition company (SPAC), sources told Reuters earlier this week.

The office-sharing startup's plans for its high-profile initial public offering (IPO) imploded in October 2019 due to investor concerns over the office-sharing startup's business model and its founder Adam Neumann's management style.

The company is also raising US$1.3 billion in capital, including US$800 million in private investment from Insight Partners, funds managed by Starwood Capital Group, Fidelity Management and others, the Journal reported. WeWork did not immediately respond to a request for comment.

A SPAC is a shell firm that uses proceeds from an IPO to buy a private firm. WeWork was valued at nearly US$47 billion in 2019 but saw its valuation plummet to roughly US$8 billion after SoftBank was forced to extend a life-saving financing lifeline to WeWork. BowX Acquisition raised US$420 million in its IPO in August last year. REUTERS