(ATF) Office-sharing company WeWork is in talks to go public through a merger with a special purpose acquisition company (SPAC) barely a year after its failed initial public offering (IPO), according to reports on January 29.
The much criticised company is also exploring raising funds from private investors, despite the implosion of its high-profile listing plan in October 2019. The company was savaged by investors over its business model and founder Adam Neumann's ostentatious management style.
The Wall Street Journal earlier reported that WeWork was in talks with a SPAC affiliated with Bow Capital Management over a deal could value WeWork at nearly $10 billion, a far cry from the $47 billion valuation touted in 2019. The company's value fell to $8 billion after SoftBank was forced to extend a life-saving financing lifeline to WeWork.
Reuters said today that WeWork had held talks with at least three blank-cheque firms over the past two months, cautioning that current talks could fall apart.
"We have SPACs approaching us on a weekly basis," said Marcelo Claure, WeWork executive chairman and chief operating officer of SoftBank Group Corp, which bailed out WeWork after its funding collapsed.
'MOVING TOWARDS GOALS'
A spokeswoman for WeWork told Reuters the company was exploring options, including a SPAC deal. "Over the past year, WeWork has remained focused on executing our plans for achieving profitability. We will continue to explore opportunities that help us move closer towards our goals."
Investments through SPACs have surged in recent months, notably in healthcare, technology, energy transition, financial and consumer sectors. A SPAC is a shell company that raises money in an IPO to merge with a privately-held company that then becomes publicly traded as a result.
SPACs have emerged as a popular IPO alternative for companies, providing a path to going public with less regulatory scrutiny and more certainty over the valuation that will be attained and funds that will be raised.
WeWork's Claure has said the New York-based company was undergoing a revival after its brush with death, citing workforce cutbacks, lease renegotiations and asset sales. He said there was still strong demand for flexible work space since the start of the coronavirus pandemic, with companies seeking small, satellite offices near where employees live.
Some tenants had refused to pay rent during Covid-19 shutdowns, but Claure said Mastercard, ByteDance, Microsoft and Citigroup had all signed new lease deals with WeWork.
With reporting by Reuters and Agence France-Presse