Adam Neumann and several partners submitted an offer to buy WeWork out of bankruptcy for more than $500 million, putting one of the tech world’s most controversial founders a step closer to regaining control of his long-troubled start-up.
Neumann and his real estate firm, Flow, had pulled together a financing package for the co-working firm, Bloomberg News reported in February. The Wall Street Journal reported Monday that Mr Neumann offered to buy the company for more than $500 million, citing people familiar with the matter.
“Two weeks ago, a Coalition of half a dozen financing partners – whose identities are known to WeWork and its advisers – submitted a potential bid for substantially more than the Wall Street Journal reported,” said a representative of Flow.
The bid adds another dramatic chapter to the saga of WeWork and its charismatic founder, the subject of books, podcasts, a television series and a movie. The co-working giant reached a peak valuation of $47 billion and became the biggest private occupier of office space in Manhattan.
[ After WeWork, the office is dead: long live the officeOpens in new window ]
Yet the business cratered after it tried to go public in 2019, exposing yawning losses and controversial business practices. Mr Neumann stepped down the same year in an attempt to salvage the company, but WeWork’s expensive office leases and Covid-era lockdowns weighed on its financials.
The New York-based firm filed for bankruptcy last year, listing $19 billion of liabilities and $15 billion of assets.
It wasn’t immediately clear how Mr Neumann would finance the acquisition of the provider of shared office space, the Wall Street Journal reported.
WeWork said in an emailed statement that it remains focused on emerging from Chapter 11 bankruptcy protection in the second quarter as a “financially strong and profitable company.”
“WeWork is an extraordinary company and it’s no surprise we receive expressions of interest from third parties on a regular basis,” the company said. “Our board and our advisers review those approaches in the ordinary course, to ensure we always act in the best long-term interests of the company.”
Mr Neumann, previously WeWork’s chief executive officer, and other investors including Dan Loeb’s Third Point were exploring an offer to buy WeWork out of bankruptcy, Bloomberg reported last month. Third Point isn’t involved in Neumann’s bid, said people familiar with the matter, who asked not to be identified because the information was private. A representative for the firm declined to comment.
Mr Neumann’s Flow received a $350 million investment from venture capital firm Andreessen Horowitz at a $1 billion valuation in 2022 before even beginning operations. Flow operates multifamily residential properties that aim to foster a feeling of ownership and community.
Although WeWork’s office locations initially emptied out during the Covid pandemic, demand for flexible work proved somewhat resilient. The company eventually went public in 2021 through a combination with a special purpose acquisition company, or SPAC.
Before it fell into bankruptcy, WeWork had been trying to deliver a turnaround story – one in which the rowdy co-working start-up transforms into a stable, profitable public company. – Bloomberg L.P.
