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JP Morgan threatens to lose the WeWork bet, a blow to CEO Dimon



Jamie Dimon, CEO of JPMorgan Chase & Co., will speak on Wednesday, September 25, 2019, at the Bloomberg Global Business Forum in New York.

Tiffany Hagler-Geard | Bloomberg | Getty Images

WeWork, but WeDon & # 39; tGetPaid.

This is the terrible reality faced by JP Morgan Chase bankers as WeWork is about to accept a deal to sell control of the office-sharing company to SoftBank in the form of a debt and equity package.

JP Morgan is the third largest external shareholder of WeWork after SoftBank and Benchmark. The bank would have been the so-called "lead left" adviser to WeWork's IPO and lead financier on an $ 6 billion related credit facility.

Instead, the bank will not raise money for anything In the three weeks since WeWork withdrew its IPO, JP Morgan has been trying to find an alternative funding to rescue WeWork, which should expire from cash until mid-November CNBC reports last Week. The bank has held talks with more than 1

00 investors to bring together a $ 5 billion debt package – an alternative to the SoftBank rescue plan.

J.P.. Morgan has raised the money, but will not overvalue the company by using more equity, according to a person familiar with the matter. The bank also declined to add a takeover bid to its bailout package that would allow co-founder and ex-CEO Adam Neumann to sell more shares, said the person who asked not to be named because the plan is confidential , In addition, SoftBank will pay hundreds of millions to Neumann to leave the board, give up its voting rights and support the acquisition of SoftBank, Axios said. This also did not want JP Morgan.

David Faber of CNBC On Monday it was first reported that WeWork plans to reject JP Morgan's financing plan in favor of SoftBank, which combines debt and equity. SoftBank plans to invest between US $ 1 billion and US $ 3 billion in a takeover bid, in addition to accelerating a $ 1.5 billion capital injection and $ 5 billion in debt.

The WeWork board is likely to meet on Tuesday to finalize details on the sale of control of the company to SoftBank, said the people who requested anonymity because the discussions are private.

If the board endorses the plan and leaves JP Morgan in the dark, it will be a big blow for CEO Jamie Dimon, who has personally worked with Neumann to bring the company into public markets. Dimon's goal is to break up Goldman's IPO duopoly, Sachs-Morgan Stanley, and touted his bank's recent success.

"We have made tremendous progress in Silicon Valley," said Dimon last at a panel discussion in the Silicon Valley year.

WATCH: SoftBank deal for WeWork may sound pretty reasonable: Pro


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