SoftBank Group Corp. told shareholders of WeWork that it could withdraw from an agreement to buy $3 billion of stock in the embattled co-working business, casting doubt on a deal that had been set to close in about two weeks.
In a message to stockholders reviewed by Bloomberg, the Japanese conglomerate cited numerous government inquiries into WeWork, including those from U.S. attorneys, the Securities and Exchange Commission, attorneys general in California and New York and the Manhattan district attorney. Spokeswomen for SoftBank and WeWork parent company We Co. declined to comment. The Wall Street Journal reported the email to shareholders earlier Tuesday.
The stock purchase was part of a rescue financing from SoftBank after WeWork’s failed initial public offering last year. SoftBank already invested $1.5 billion as part of the bailout in October and is looking to arrange billions of dollars more in debt. A delay or cancellation of the offer to buy stock would cut off a source of income many former and current WeWork employees had been counting on. Adam Neumann, who was ousted as chief executive officer during the turmoil, was due to cash out as much as $970 million.
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