- WeWork is still waiting for a big chunk of the $9.5 billion bailout it agreed with SoftBank, according to The Real Deal.
- SoftBank has postponed a $3 billion tender offer scheduled to begin more than a week ago, the real-estate news outlet reported, citing unnamed sources.
- The holdup is causing “lots of anxiety,” a WeWork investor told Reuters.
- The news drove the yield on WeWork’s junk bonds to a record 15.02% and widened their spread to a new high of 13.4 percentage points, Reuters reported.
- Read more of BI’s WeWork coverage here.
WeWork is still waiting for a big chunk of the $9.5 billion bailout it agreed with SoftBank, according to The Real Deal, fueling fresh concerns about the troubled coworking startup and the Japanese conglomerate set to take control of it.
SoftBank has postponed a $3 billion tender offer scheduled to begin more than a week ago, the real-estate news outlet reported, citing unnamed sources.
The tender offer, which would allow WeWork’s investors to sell up to $3 billion worth of shares to SoftBank, “is going to happen soon,” a person close to SoftBank told The Real Deal. “It’s just taking a little more time than expected due to the time needed to get all the technicalities in order.”
A WeWork investor confirmed the delay to Reuters, saying it “will likely be resolved” but the holdup is causing “lots of anxiety.”
Investors bid down the price of WeWork’s junk bonds on the news, driving their yield to a record 15.02% and widening their spread — an indicator of the perceived risk of holding them versus US government debt — to a new high of 13.4 percentage points, Reuters said.
The delay comes days after both SoftBank and WeWork reported disappointing third-quarter earnings. SoftBank suffered its first quarterly loss in 14 years after WeWork’s troubles translated into an $8.9 billion decline at its $100 billion Vision Fund I. WeWork’s net loss more than doubled to $1.25 billion, and its available cash shrunk by about 40% in three months to about $1.3 billion.
The rescue deal, which is set to give SoftBank about 78% ownership of WeWork, was agreed after the startup scrapped its plans to go public in September. WeWork made the call after investors railed against its heavy losses, business model, governance, and the controversial behavior of cofounder and then-CEO Adam Neumann. The IPO disaster led SoftBank to value WeWork below $5 billion at the end of September — a fraction of its private valuation of $47 billion in January.
WeWork declined to comment to Business Insider, while SoftBank didn’t immediately respond to a request for comment.