WeWork sues SoftBank for canceling the tender offer for 300 billion yen seeking damages

SoftBank Corp. has announced that it has canceled a $ 3 billion tender offer for The We Company, the operator of WeWork , a co-working space provider. In response, a special committee of the WeWork Board of Directors announced that it has filed a lawsuit against SoftBank for damages.

WeWork Special Committee Files Lawsuit Challenging SoftBank's Wrongful Decision to Terminate Tender Offer | Business Wire
https://www.businesswire.com/news/home/20200407005479/en/WeWork-Special-Committee-Files-Lawsuit-Challenging-SoftBank%E2%80%99s

WeWork sues SoftBank in intensifying crisis over canceled $ 3B tender offer | TechCrunch
https://techcrunch.com/2020/04/07/wework-sues-softbank-in-intensifying-crisis-over-canceled-3b-tender-offer/

`` WeWork '' operated by The We Company provides a service to rent office space on a desk or room basis, and the needs of start-up companies and startups who have just started a business who want to set up an office even on a small scale Was talked about as a business that fits. However, although the quality of the service itself was high, the business model was inadequate, and due to the strangeness of founder and CEO Adam Newman, various things happened when trying to make an initial public offering (IPO). Problems erupt. Eventually, The We Company has announced its withdrawal of the listing application.

Experts criticize `` WeWork '', whose CEO retired on a large flame despite Softbank making a large investment, but failed-GIGAZINE

In October 2019, WeWork announced that it would promote management restructuring under the SoftBank Group. The SoftBank Group exercised $ 1.5 billion (approximately 165 billion yen) of stock acquisition rights, and at the same time, conducted a `` tender offer '' to purchase up to $ 3 billion of The We Company shares from other shareholders, followed by another $ 5 billion (550 billion (Yen) will be invested in WeWork through bond issuance and financing. At the same time, the founder, Newman, retired from the board of directors and left the company.

Softbank G announces $ 9.5 billion support to WeWork (Photo: Reuters): Nihon Keizai Shimbun
https://www.nikkei.com/article/DGXMZO51282580T21C19A0MM0000/

However, Reuters reports in mid-March 2020 that the SoftBank Group is considering reversing its $ 3 billion tender offer. And on April 2, 2020, SoftBank officially announced that it had canceled the tender offer on the grounds that the terms of the joint venture in China were not yet complete.

Softbank suspends $ 3 billion tender offer for WeWork shares-CNET
https://japan.cnet.com/article/35151806/

'The failure of SoftBank to execute the Tender Offer is a breach of the contractual obligations under SoftBank's Master Transaction Agreement , as well as hundreds of current and former employees. It is clear that this is a breach of fiduciary duty to WeWork's minority shareholders, including. The Special Committee regrets that SoftBank prioritizes its interests. '

In addition, the Special Committee said that `` WeWork is expected to pose a significant risk, '' regarding the investigation of WeWork and the case where shareholders filed a class action against former Newman and SoftBank Group chairman Masayoshi Son. Has not been the case ', arguing that SoftBank was not a reason to cancel the WeWork tender offer. He requested SoftBank to make the tender offer on time and said, 'We will seek damages for SoftBank's breach of contract.' He has filed a complaint with the Delaware Court of Justice.

A SoftBank spokesman told TechCrunch, an IT-related news site: 'Nothing submitted by the Special Committee denies that SoftBank has canceled the tender offer. Special Committee, WeWork Some of the terms agreed by Adam Newman, SoftBank and SoftBank Vision Fund in October 2019 were not met as of April 1, 2020. '