Adam Neumann has formally admitted defeat in his bid to buy back WeWork, ending his bid to acquire the co-working company he co-founded in 2010 and grew into a global company valued at $47 billion before it went bankrupt last year.
“For several months, we sought to work constructively with WeWork to develop a strategy that would allow the company to be successful,” Mr. Neumann said in a statement to the DealBook newsletter. “Instead, the company appears to be emerging from bankruptcy with a plan that appears unrealistic and unlikely.”
The writing was on the wall for weeks. Mr. Neumann resigned as WeWork’s chief executive in 2019 amid pressure from directors and investors after the company failed to go public amid questions about its business model and corporate governance. It was a stunning fall for Mr. Neumann, the company’s charismatic frontman.
But in February, DealBook reported that Mr. Neumann was planning a bold move to buy the company back.
His new real estate company Flow, backed by venture capital firm Andreessen Horowitz, offered more than $500 million. The plan was to buy WeWork or its assets and provide bankruptcy financing to keep the company afloat.
But WeWork has found another lifeline. A U.S. bankruptcy judge last month approved a restructuring agreement that essentially wiped out $4 billion in corporate debt. That also included $450 million in new funding from SoftBank, the Japanese technology investor that has backed WeWork since its inception and enabled the company to emerge from Chapter 11 bankruptcy.
WeWork has been busy renegotiating leases to get rid of $11 billion in rental obligations. The rise of hybrid work since the coronavirus pandemic has hit the commercial real estate sector hard. A rise in vacancies has helped companies like WeWork rework contracts with landlords, but has also raised doubts about the growth potential of the shared office business model.
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2024-05-28 13:08:42
www.nytimes.com
