Adam Neumann has officially admitted failure in his quest to buy WeWork, ending his bid to acquire the coworking company he helped found in 2010 and turn into a global company valued at $47 billion. dollars before it went bankrupt last year.
“For several months, we tried to work constructively with WeWork to create a strategy that would allow it to thrive,” Mr. Neumann said in a statement to the DealBook newsletter. “Instead, the company appears to be emerging from bankruptcy with a plan that seems unrealistic and unlikely to succeed. »
The writing was on the wall for weeks. Mr. Neumann resigned as WeWork’s chief executive in 2019 under pressure from directors and investors, after the company failed to go public due to questions about its business model and its corporate governance. It marked a stunning fall for Mr. Neumann, the company’s charismatic leader.
But in February, DealBook reported that Mr. Neumann was considering a bold move to buy the company.
His new real estate company, Flow, backed by Andreessen Horowitz, the venture capital firm, offered more than $500 million. The plan was to buy WeWork or its assets and inject bankruptcy financing to keep it afloat.
But WeWork has found a different lifeline. A U.S. bankruptcy judge last month approved a restructuring deal that essentially wiped out $4 billion in the company’s debt. It also included $450 million in new funding from SoftBank, the Japanese tech investor that has backed WeWork since its beginnings, allowing it to emerge from Chapter 11 bankruptcy.
WeWork has been busy renegotiating leases in an effort to shed $11 billion in rent obligations. The rise of hybrid working since the coronavirus pandemic has hit the commercial real estate sector hard. The rise in vacancies has helped companies like WeWork rework their deals with landlords, but also cast doubt on the growth potential of the shared office business model.
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News Source : www.nytimes.com
