US: WeWork co-founder Adam Neumann is attempting to buy the company out of bankruptcy.
Neumann approached WeWork in December about a possible deal but WeWork initially “resisted” the approach, according to a letter from Neumann’s lawyers, worried that it would hurt talks with landlords.
Eventually WeWork said it would consider a financing proposal, but the letter said Neumann has yet to receive information to help inform its offer.
It also claimed WeWork cancelled a meeting in 2022 to discuss a proposed $1 billion (£790 million) in financing from Neumann while he was en route in the air.
“We write to express our dismay with WeWork’s lack of engagement even to provide information to my clients in what is intended to be a value-maximizing transaction for all stakeholders,” wrote Alex Spiro of law firm Quinn Emanuel, who confirmed the authenticity of the letter, which was first reported by the New York Times.
Spiro wrote that Neumann offered “management expertise” and a takeover could boost the value of the firm.
“WeWork should at least educate itself about that potential and not preclude itself from maximising value,” he said.
According to the letter, Neumann is “partnering” with investors, including the hedge fund Third Point.
Third Point said it had only had “preliminary conversations with Flow and Adam Neumann about their ideas for WeWork, and has not made a commitment to participate in any transaction”.
WeWork, which was once valued at $47 billion, filed for bankruptcy last November with more than $18.6 billion of debt. Over several years it had raised more than $22 billion from investors such as SoftBank, BlackRock and Goldman Sachs.
When asked about Neumann’s buyback attempt, WeWork said: “WeWork is an extraordinary company. As such, we receive expressions of interest from external parties on a regular basis. We and our advisors always review those approaches with a view to acting in the best interests of the company. We continue to believe that the work we are currently doing — addressing our unsustainable rent expenses and restructuring our business — will ensure WeWork is best positioned as an independent, valuable, financially strong and sustainable company long into the future.”
In August 2022, Neumann secured around $350 million of investment from Silicon Valley venture capital firm Andreessen Horowitz (a16z) for his latest venture, a residential real estate project called Flow. The investment is the largest single round of backing in a16z’s history,
