SoftBank To Give WeWork's Adam Neumann Extra $50M As Part of Settlement Deal

WeWork’s co-founder Adam Neumann is set to benefit from a $50 million bonanza along with other benefits as a part of a settlement agreement with SoftBank Group Corp SFTBY, the Wall Street Journal reported Wednesday.

What Happened: SoftBank will give the former WeWork CEO a $50 million in a special payout and a five-year term extension on a $430 million loan made out to him in 2019, people familiar with the matter told the Journal.

SoftBank is also due to pay $50 million for Neumann’s legal fee. 

Neumann and other early investors in WeWork are reportedly nearing a deal with the Japanese conglomerate, where the latter would purchase $1.5 billion of stock from other investors, including almost $500 million from Neumann, according to the Journal.

SoftBank shares traded 3.74% higher in Tokyo at press-time.

Why It Matters: The largesse for Neumann sets him apart from other shareholders. If the deal is reached, a trial in March could be averted, noted the Journal.

In April last year, WeWork sued SoftBank after the latter canceled plans to purchase $3 billion of WeWork’s shares. 

The extra payment to Neumann is unlikely to go down well with WeWork’s employees and investors, who were furious when a $185 million payment was revealed, as per the Journal.

WeWork is negotiating a possible merger with the blank check company BowX Acquisition Corp BOWX in order to go public. The two firms could reach an agreement as early as next week, according to the Journal’s sources.

Price Action: On Wednesday, SoftBank OTC shares closed nearly 1.7% lower at $47.75.

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