WeWork will merge with Spack BowX at a value of $ 9 billion – Global

If we thought the epidemic was hitting the office and rental workspace industry fatally, Softbank’s WeWork (SFTBY) came and merged with the Spack – a stock market skeleton set up to merge private business into it – BowX worth $ 9 billion. Apparently as with tourism, aviation and oil, the expectation is for the start of a return to office routine in the second half of the year or early next year.

According to a report in the Wall Street Journal, the company will raise $ 1.3 billion, 800 million of that from PIPE funds, the acronym for Private Investment in Public Shares. This means that the issuing company finds qualified investors who will invest in it and gives them priority. WeWork chose Insight, Fidelity, Starwood Capital and Blackrock.

As you may recall, in 2019, the company, then under the leadership of founder Adam Neumann, planned to go public at a valuation of $ 47 billion. The inflated value, together with billions of dollars in losses, deterred even the most bullish investors, which led to a halt to the IPO and its departure by slamming Neumann’s door.

WeWork CEO Sandip Methrani said the company has changed since then, after sharp cuts in portfolio optimization and exit from non-cold business-related investments.

“WeWork has been working for the past year to turn it into a business that deals with cold business, while at the same time being able to manage and innovate in the market during historic declines,” Matherani said. “As a result, WeWork has emerged as a global leader in flexible space with a value proposition that is stronger than ever,” he added.

The merger is expected to take effect in the third quarter of this year, with the merged company having $ 1.9 billion in cash and a total liquidity of $ 2.4 billion, including $ 550 million in bonds issued by Superbank. BowX is up more than 10%.