After SoftBank walked away from a $3 billion tender offer to buy back WeWork shares early last month, the frenemies seemingly became complete rivals.
SoftBank’s faith in the coworking company has been shaken as the Japanese conglomerate faces a series of disappointing bets, including WeWork, Uber, dog-walking company Wag and several others.
Had the company gone through with the tender offer, the biggest beneficiary would have been former CEO and co-founder of WeWork Adam Neumann, who was ousted from his position after the company’s failed attempt to go public.
Soon after the conglomerate walked away from the tender offer, a special committee of the board of The We Company sued SoftBank, claiming it had a fiduciary duty to follow through with the deal. Neumann soon followed with his own lawsuit.
“SoftBank’s wrongful action constitutes both a breach of contract and a breach of fiduciary duty to WeWork’s minority stockholders, including hundreds of its current and former employees,” said the special committee in a press release at the time.
SoftBank cited that WeWork had failed to meet multiple contractual conditions, allowing it to back out of the deal. These included shareholders failing to exchange their shares in WeWork’s Chinese joint venture for shares in WeWork, which the deal was contingent upon, as well as the multiple civil and criminal investigations into the coworking firm.
However, WeWork’s special committee claims to have evidence that SoftBank had sabotaged the rollup of the Chinese joint venture, stating that CEO Masayoshi Son persuaded a ChinaCo shareholder to veto the rollup.