WeWork plows ahead with IPO, announces governance changes

Bloomberg

WeWork is pressing ahead with plans for a public listing, announcing a series of governance changes aimed at shoring up a sagging valuation and assuaging critics who say it gave too much power to a polarising co-founder.
The company will trim the voting advantage that gives chief executive officer Adam Neumann sway over the board, and no member of his family will be allowed to sit on the board, it said in a regulatory filing. WeWork will also announce a lead independent director by year’s end.
The moves aim to give potential investors a check on Neumann’s control of the company and address some of the most unusual dealings between founder and firm. But it left in place a rare three-class stock structure and Neumann still maintains a voting majority, so it’s unclear how much the changes will appease both investors and the banks in charge of managing WeWork’s IPO.
Questions remain about how investors will value the fast-growing, money-losing office leasing business that’s backed by SoftBank. Both of the company’s lead financial advisers — JPMorgan Chase & Co and Goldman Sachs Group Inc — have previously voiced concerns about proceeding with an IPO at a valuation around $15 billion, people briefed on the discussions have said.
The company and its advisers were discussing a valuation range of $15 billion to $20 billion, people with knowledge of the talks said. SoftBank Group Corp, which with its affiliates is WeWork’s biggest backer with a 29 percent collective stake and invested in January at a valuation of $47 billion, is in discussions to buy about $750 million worth of additional stock in the offering, the people said. The company has been looking to raise at least $3 billion in the IPO, and SoftBank’s purchase would limit its dilution.
Spokespeople for SoftBank and WeWork declined to comment.
The company plans to start its IPO roadshow as soon as Monday, though that timeline could be delayed depending on investor demand, said a person with knowledge of the matter. WeWork said it picked Nasdaq as its listing venue.
The new filing revealed that Neumann will return any profits he receives from the real estate transactions he has entered into with the company, and that any CEO who succeeds Neumann will be selected by board of directors.