SoftBank takes control of WeWork as part of bailout; Adam Neumann leaves board.

Adam Neumann onstage during TechCrunch Disrupt NY 2017.
Neumann is expected to leave the WeWork board
 as part of a rescue financing plan.(Noam Galai)

SoftBank Group Corp. is taking control of beleaguered WeWork, part of a rescue financing plan that will see former Chief Executive Adam Neumann sever most of his remaining ties with the company he co-founded, according to people familiar with the matter.

The eleventh-hour deal throws a lifeline to WeWork parent We Co., which was on the verge of running out of cash after a failed public offering in September. By salvaging one of its biggest investments, SoftBank will give a second chance to WeWork to start over under new ownership. It also tosses a buoy to Neumann, who will give up his board seat and walk away with as much as $1.2 billion as well as a $500-million credit line from SoftBank, after it pushed him out as CEO last month.

Neumann is allowed to sell slightly less than $1 billion of stock to the Japanese conglomerate as part of the deal, said the people, who asked to remain anonymous because the agreement hasn’t been announced. He’ll remain as a board observer and can assign two board seats, one of the people said. Neumann will also get a roughly $185-million consulting fee. His net worth would still be at least $1 billion, according to calculations by the Bloomberg Billionaires Index.



Full story at LA Times.
By Gillian Tan and Michelle F Davis.