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SoftBank attempted to delay WeWork's US$3b share purchase: US court filing

SoftBank attempted to delay WeWork's US$3b share purchase: US court filing

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3 -min read
Listen to this article

[BENGALURU] SoftBank Group chief executive officer (CEO) Masayoshi Son told the executive he tasked to turn WeWork around after its botched initial public offering to "use whatever excuse" to delay a US$3 billion payout to the office-sharing startup's shareholders, a court transcript released on Wednesday showed.

The transcript, part of a Delaware court filing, provides new details on the decision by SoftBank to scrap a US$3 billion tender offer to repurchase stock from existing shareholders, including founder Adam Neumann and employees.

A WeWork board committee that negotiated the tender offer sued SoftBank in April over that decision, accusing the Japanese company of "buyer's remorse" amid the coronavirus outbreak.

The transcript includes an undated text exchange between Mr Son and Marcelo Claure, who he installed as WeWork's executive chairman last October.

Mr Claure told Mr Son that SoftBank Group Tokyo had "made a late request" to delay the tender offer payment until April 1, 2020 from Feb 28, 2020.

Mr Son replied: "It's great to postpone the close of tender....

Use whatever excuse to make senses."

Mr Claure responded: "Ok. Will use antitrust. I am turning good at excuses like someone I know very well :)" The court filing was made by Mr Neumann and We Holdings in an effort to compel SoftBank to produce documents they claim had been improperly withheld.

A SoftBank spokesperson said in an email: "Cherry-picking quotes from documents doesn't change the facts: under the terms of our agreement SoftBank had no obligation to complete the tender offer in which Mr Neumann - the biggest beneficiary - sought to sell nearly US$1 billion in stock."

WeWork did not immediately respond to a request for comment.

SoftBank said earlier this year it would not complete the tender offer because several conditions had not been met.

Among the reasons it cited were US criminal and civil investigations into WeWork, the failure to restructure a joint venture in China, and the pandemic.

SoftBank's decision frustrated WeWork shareholders expecting a payout. Mr Neumann, who was replaced as WeWork CEO last year, was to have sold the bulk of the shares.

The tender offer was part of a nearly US$10 billion rescue package for WeWork negotiated last October and which gave SoftBank control of the company.

Since then, the pandemic has hurt WeWork's occupancy rates, as corporate clients in big cities escape shared workspaces and ask employees to work from home.

REUTERS

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