WeWork Mulls Going Public Via SPAC Merger
USA – Following a failed initial public offering (IPO) in 2019, sources revealed that coworking space provider WeWork is considering to become a publicly traded company via a merger with a special-purpose acquisition company (SPAC), reported The Wall Street Journal on Thursday afternoon (28 January, SGT).
The insiders shared that the company’s board and its CEO Sandeep Mathrani are mulling offers from a SPAC connected with Bow Capital Management and at least one other unnamed acquisition entity for several weeks.
Notably, Bow Capital Management is controlled by Vivek Ranadivé. Apart from being the founder of Tibco Software, he is also the owner of NBA team, the Sacramento Kings. Interestingly, basketball legend Shaquille O’Neal is of the venture firm’s advisers, and its SPAC raised US$420 million in funding last year.
A successful deal could give WeWork a valuation of about US$10 billion, but it’s significantly lower than the firm’s peak valuation of US$47 billion in early 2019. It’s also unknown if the US$10 billion figure includes debt.
Aside from that, WeWork also got separate offers for a new private investment round, and it could choose that offer instead, one of the sources said. If that happens, the company would remain private and use the additional funding to bolster its growth plans.
The discussions are not simple, and there’s no guarantee that the coworking giant will accept any deal soon, clarified the sources.
When asked to comment, WeWork’s Chief Communication Officer Lauren Fritts stated that “over the past year, WeWork has remained focused on executing our plans for achieving profitability.”
“Our significant progress combined with the increased market demand for flexible space, shows positive signs for our business. We will continue to explore opportunities that help us move closer towards our goals.”
A WeWork representative also shared that it has over US$3.6 billion in cash & unfunded cash commitments, including US$875 million in cold cash. The coworking space operator thinks this is “more than sufficient liquidity to weather a prolonged COVID environment.”