A WeWork board committee involved in negotiating with SoftBank Group a tender offer of $3 billion has sued the Japanese conglomerate on Tuesday.
On discarding the deal in the midst of coronavirus pandemic, the committee sued SoftBank on accusation of “buyer’s remorse” due to the outbreak of viral disease.
In October last year, SoftBank agreed with WeWork upon a $9.6 billion tender offer as part of rescue financing package for getting control of the WeWork. But the office space-sharing start-up has been facing tumbling rates of its space occupancy because of the spread of virus since then, a situation raised out of its customers in big cities preferring staying home to in their efforts to fight coronovirus spread.
The lawsuit came following SoftBank’s last week announcement of shunning the tender offer on the basis of non fulfillment of many pre-decided conditions by the start-up firm, a move which created frustration among the minority shareholder in WeWork expecting to be getting a payout.
Adam Neumann, WeWork’s co-founder and former Chief Executive Officer, venture capital firm Benchmark Capital, an investor in WeWork and employees having stakes in the company in shape of equity were also among those expectants.
In its statement, SoftBank though not rejected the impact of the COVID-19 on the start-up’s business but said it has been discarding the deal on the basis of civil and criminal investigations against the start-up firm in the United States and its inability to reform a joint venture in China.
WeWork’s independent two-member special committee is comprised of a general partner at Benchmark Capital Bruce Dunlevie and the former CEO of luxury handbag maker Coach Lew Frankfort. The committee called the SoftBank’s decision of terminating the tender offer as wrongful.
SoftBank in its statement on the filing said that it will vigorously defend the suit as there in no credibility in the special committee’s filing to disapprove its decision of terminating the tender offer.