Group Corp is taking control of beleaguered WeWork, part of a rescue financing plan that will see former CEO Adam Neuman 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 chief executive officer 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.
and JPMorgan declined to comment. WeWork couldn’t immediately be reached. Dow Jones earlier reported details of the deal.