A WeWork board that negotiated a $3 billion tender offer with SoftBank Group sued the Japanese group Tuesday for abandoning the offer, accusing it of succumbing to “buyer’s remorse” amid the novel coronavirus pandemic.
The tender offer was a part of a $9.6 billion rescue financing package that SoftBank agreed with WeWork in October that gave it control of the corporate. Since then, the office space-sharing start-up’s occupancy charges have plummeted, as customers in big cities remain at home to stop the spread of the virus.
SoftBank stated last week it would not press ahead with the tender offer because a number of pre-conditions had not been fulfilled, frustrating WeWork’s minority shareholders, who were anticipating a payout. They included co-founder and former CEO Adam Neumann, enterprise capital firm Benchmark Capital and staff with equity in the firm.
Whereas SoftBank cited the enterprise influence of the COVID-19 pandemic as one of many causes, it might not full the tender provide, and it additionally pointed to U.S. legal and civil investigations into WeWork and the failure to restructure a partnership in China as grounds for abandoning it.
An unbiased two-member particular committee of WeWork filed the lawsuit, calling SoftBank’s choice to terminate the tender provide wrongful. The committee includes Bruce Dunlevie, who’s a basic associate at WeWork shareholder Benchmark Capital, and Lew Frankfort, who’s the previous CEO of luxurious purse maker Coach.