SoftBank founder Masayoshi Son (L) and WeWork founder Adam Neumann.
SoftBank has prepared a funding package to take control of WeWork and further sidelines to the company's founder Adam Neumann, The Wall Street Journal reported, citing people familiar with the matter.
SoftBank already owns a third of WeWork, but aims to invest several billion dollars in additional equity and debt in the company, sources told The Journal. The potential deal would shift Neumann's already reduced voting power to the Japanese conglomerate, according to the Journal. This will give SoftBank a greater role in turning the company's business around.
The situation is fluid and there is no guarantee that an agreement will be reached.
Last month, Neumann announced his resignation as CEO after the company postponed the initial public offering amid an uproar over its governance and valuation. A source told CNBC at the time that Neumann also gave up majority control by agreeing to a reduction of its voting power from 1[ads1]0: 1 to 3: 1. He was the company's largest individual stakeholder with around 115 million shares.
SoftBank CEO Masayoshi Son, who invested billions of dollars in WeWork, led the charge to remove Neumann as CEO, told people familiar with Son's thinking at CNBC at the time.
SoftBank had invested $ 2 billion in WeWork for a valuation of $ 47 billion in January. WeWork's aborted IPO would have forced SoftBank to write down its investment, and the operating result would have hit 15% if the public offering had been valued at $ 20 billion, according to analysts at research firm Bernstein.
– CNBC's Alex Sherman and Laura Feiner contributed to this report
Read the full report in The Wall Street Journal