Ousted WeWork founder launches bid to buy back bankrupt company
WeWork founder Adam Neumann has launched an attempt to regain control of the bankrupt office company with more than $500m (£395m), five years after he was ousted following a botched attempt to take it public.
A coalition of bidders led by Mr Neumann’s property company Flow have tabled a bid to buy WeWork, which filed for bankruptcy protection in November saying it could not afford to keep paying for hundreds of office leases.
If he is successful it would be a spectacular return for the 44-year-old, who once described his business as “not just a company [but] a movement”, and attracted a devoted cult of followers before being forced out amid allegations of wild behaviour and alcohol-fuelled partying.
WeWork sought to reshape the world of corporate offices with stylish, modern spaces where businesses could work side by side.
It would rent entire floors or buildings and sublease individual spaces to companies on monthly contracts, in buildings that offered free alcohol and networking events.
However, the pandemic and subsequent rise of home working contributed to WeWork being unable to maintain a vast portfolio of offices that had made the US company one of the world’s biggest corporate landlords.
Mr Neumann founded WeWork in 2010 and sought to take it public in 2019 at a valuation of up to $47bn.
But the flotation collapsed amid questions about its business model and allegations about Mr Neumann’s impulsive behaviour, including banning meat at company events, taking drugs on international flights, and hosting tequila-fuelled office parties.
He was ousted in 2019, shortly after the company cancelled plans to go public, resigning and giving up his voting shares in exchange for an exit package worth hundreds of millions.
Mr Neumann said in February that he was seeking to buy the company back, accusing lawyers overseeing the bankruptcy process of refusing to engage with him so that he could make a bid.
On Monday night Flow confirmed that it had arranged an offer after The Wall Street Journal reported that Mr Neumann had made an approach. Reports suggested it could be worth up to $900m.
“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 $500m]” a Flow spokesman said.
Lawyers for Mr Neumann had previously said that the billionaire hedge fund investor Dan Loeb was interested and could join a bid, but he is not believed to be involved.
WeWork said it was focused on restructuring the business. It is likely to emerge from bankruptcy protection in the coming weeks owned by its creditors, who would be likely to have the final say over any takeover.
A spokesman said: “As we’ve said previously, WeWork is an extraordinary company and it’s no surprise we receive expressions of interest from third parties on a regular basis. 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.
“WeWork remains intensely focused on finishing the important work we began back in November, and believe we will emerge from Chapter 11 [bankruptcy] in the second quarter as a financially strong and profitable company.”
