Softbank pulls the plug on WeWork bailout, giving co-founder Adam Neumann another black eye

Softbank Group has retracted its $3 billion offer for WeWork, although it remains committed to providing $5 billion in debt to the company. Yahoo Finance’s Alexis Christoforous and Brian Sozzi discuss the details.

Video Transcript

ALEXIS CHRISTOFOROUS: All right. Want to move over now to a story that you scooped actually regarding SoftBank and WeWork and former CEO, Adam Neumann. What can you tell us?

BRIAN SOZZI: Yeah, Alexis. Yahoo Finance broke this story late last night. Basically SoftBank has pulled its $3 billion tender offer for WeWork. The bottom line here is that WeWork founder, Adam Neumann, won't be getting $1 billion, essentially a $1 billion bailout from SoftBank. This was a tender offer that was put together or a deal put together last October.

This has since been confirmed by SoftBank via press release this morning, and a couple of conditions here on why this will not be going through. One, the company failed to obtain all required anti-trust approvals-- anti-trust approvals by April 1. They failed to sign and close a roll up of a China joint venture.

They also failed to disclose or a roll up another Asia venture, and also the existence of multiple new and significant pending criminal and civil investigations in the company. So a lot of reasons they are for SoftBank here to come back and pull out that tender offer but in the press release they do note that WeWork has potentially enough liquidity to survive until 2024. That is a bold claim here given the fact that nobody is going to these offices right now because we're all working from home.

ALEXIS CHRISTOFOROUS: All right, Brian, thanks for the update there on WeWork and SoftBank.