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SoftBank buys at least $ 750 million in WeWork common stock for the IPO



Softbank Group
Corp.

plans to buy at least $ 750 million on the upcoming IPO of WeWork. This move could allow the office-sharing company to prop up an offer plagued by weak investor demand.

The Japanese technology group, which is already the largest investor in WeWorks parent company, would end up giving 25% or more of the shares sold in a bid that is expected to bring in at least $ 3 billion and a startup of $ 15-20 billion according to the persons familiar with the case.

This is significantly less than the $ 47 billion valuation SoftBank purchased earlier this year, reflecting skepticism about WeWork's leadership and ability to reverse heavy losses Allowing companies to withdraw the beleaguered offer ̵

1; or to score within the current range, said some respondents.

We Co., as the company is officially known, agreed early this Friday to make major changes in corporate governance and selected Nasdaq for its exchange. An application for approval details in detail the changes in corporate governance, according to which the company would appoint a lead independent director by the end of the year. We are co-founder and managing director

Adam Neumann

In addition, he has lowered the potency of his voting rights from 20 to 10 votes per share, which means a recent improvement in his power. Mr. Neumann continues to hold the majority of the voting rights, but the company said the board could recall him as CEO.

The company eliminated a provision in which his wife, Rebekah Neumann – also co-founder of We – would play a key role in choosing the successor to Mr. Neumann if he dies or is permanently disabled in the next 10 years. It was said that Mr. Neumann, who had previously agreed to sell no shares one year after the IPO, would not sell more than 10% of his share in the second and third years following the offer.

Potential investors have also questioned Mr. Neumann's $ 100 million in $ 740 million in shares and loans associated with his stakes in the company, which have been included in Wall Street Journal and US Treasury reports the applications for authorization were listed.

It is unclear whether these changes will materialize It is enough to reassure investors who have questioned Mr Neumann's unusual relationship with his company, his leadership qualities and the Board's ability to review his power.

We plan to begin marketing the shares to investors next week before the trading debut of the week of September 23, people familiar with the matter said. The company is expected to set a preliminary IPO for next week's IPO.

The public offer of the We Co. is expected to take place in September. But some investors say it may not be worth the risk. Here is the reason. Photo: David & # 39; Dee & # 39; Delgado / Bloomberg

The changes in corporate governance are a rare asset to public investors when they push for the control of a founder. With plenty of private capital and a lack of IPOs, the founders of fast-growing technology startups in recent years have been able to dictate terms that give them additional control over their property and other benefits, such as premiums tied to public offers.

companies including

Facebook
Inc.,

Google parents

alphabet
Inc.

and

snap
Inc.

have surveillance structures that give their founders control.

Lyft
Inc.

Shortly before the IPO of this year, the voting structure was changed to give the founders the majority.

We officials and their advisors have held a series of intense meetings over the past few days as the question is stirred up as to whether the company will accept the offer, one of the largest in a record year for new issues. However, the choice of a stock exchange listing the Journal has already reported on, as well as the expected downsizing and corporate governance review, show that the company has decided to plow forward, albeit less than originally hoped.

An Important Motivation We have arranged $ 6 billion of loans that are dependent on raising at least $ 3 billion from the offering.

This year's IPO madness has sparked a fierce battle between the NYSE and the Nasdaq, who see large IPOs as franchises – defining opportunities that can help them make subsequent deals, become important marketing tools, and generate new sources of revenue for the trade to open up. The listing of We was considered one of the biggest prices in the second half of the year after Nasdaq Lyft and the New York Stock Exchange landed

About Technologies
Inc.

and the direct listing of

Slack Technologies
Inc.

in the first half.

Peloton Interactive Inc. plans to debut on the Nasdaq in the coming weeks, and Endeavor Group Holdings Inc., the parent company of Hollywood's largest talent agency, is scheduled to begin trading on the NYSE. [19659003] We waited unusually long to decide on a barter. As a rule, large companies choose one when they publicly announce an IPO. There are some companies that wait longer, but the most visited IPOs in recent years have chosen a trading venue much earlier than we had planned, just days before the investor roadshow started.

Despite all the questions and concerns of investors, Mr. Neumann said privately that he was determined to push the IPO.

Speaking earlier this week to SoftBank executives, Mr. Neumann said he expects no significant changes to the business next year, and most importantly, what he now thinks is a large infusion of cash so he can continue his expansion plans , Write to Maureen Farrell at maureen.farrell@wsj.com and Corrie Driebusch at corrie.driebusch@wsj.com.

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