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WeWork's board accepts SoftBank's rescue deal

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WeWork's board has accepted a takeover plan proposed by SoftBank Group, handing control of the office-sharing startup to the Japanese firm, according to a source.

WeWork owner The We Company's board was evaluating SoftBank's offer against an alternative financing proposal from JPMorgan Chase & Co, but decided to go with SoftBank, even though the bank put together a US$5 billion (S$6.8 b) debt financing package.

This marks a stunning reversal of fortunes for WeWork, which has lost nearly US$39 billion of its valuation over the past five weeks.

During that time, it scrapped its public debut, ousted co-founder Adam Neumann as CEO and launched a cost-cut plan.

Reuters reported on Monday that SoftBank had offered a rescue package worth nearly US$10 billion to WeWork.

SoftBank had offered US$5 billion in new money to WeWork in the form of debt and had also proposed to accelerate a previous US$1.5 billion equity commitment in the form of warrants due in April.

The Wall Street Journal reported yesterday that under the deal agreed with the board, Mr Neumann would be paid nearly US$1.7 billion by SoftBank, funded by a new credit line and the sale of roughly US$1 billion of his WeWork stock. - REUTERS